The Distribution of Returns, Measured Over Long Intervals, Like Annual

question 69

Multiple Choice

The distribution of returns, measured over long intervals, like annual returns, can be approximated by

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

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Definitions:

Monetarists

Economists who posit that variability in the money supply critically impacts the short-term national economic output and the price level over longer spans.

Money Supply

This refers to the total amount of money (including cash, coins, and balances in bank accounts) in circulation within an economy at a given time.

Economic Behaviorists

Economic Behaviorists study how psychological, social, cognitive, and emotional factors affect economic decisions of individuals and institutions, and the consequences these decisions have on market prices, returns, and the allocation of resources.

Rational Behavior

Rational behavior refers to the decision-making process that involves choosing the most efficient means to achieve a desired result.