The Distribution of Returns, Measured Over a Short Interval of Time

question 24

Multiple Choice

The distribution of returns, measured over a short interval of time, like daily returns, can be approximated by:

• A) Normal distribution
• B) Lognormal distribution
• C) Binomial distribution
• D) none of the above

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Definitions:

Currency Exchange Rate

The value of one currency for the purpose of conversion to another, determining how much one currency is worth in terms of another.

Licensing

A business arrangement in which one party allows another to use its trademark, patent, or technology in exchange for a fee or royalty.

Franchising

A method of doing business wherein a franchisor licenses trademarks and proven methods of doing business to a franchisee in exchange for a recurring payment, and usually a percentage of gross sales or gross profits as well as the annual fees.

Indirect Exporting

The process of selling products to a foreign market through an intermediary, such as an export trading company or an export management company, rather than directly to the consumer or retailer.