In Its Standardized Form,the Normal Distribution

question 132

Multiple Choice

In its standardized form,the normal distribution

• A)has a mean of 0 and a standard deviation of 1.
• B)has a mean of 1 and a variance of 0.
• C)has an area equal to 0.5.
• D)cannot be used to approximate discrete probability distributions.

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Definitions:

Premium Amortization

The gradual reduction of the premium paid above the face value of a bond, allocated over the bond's life until maturity.

Effective Interest Method

An accounting practice for amortizing the discount or premium on bonds payable or receivable, which reflects the actual interest rate the bond earns.

Bond Discount

The difference between the selling price of a bond and the bond’s face value when the bond is sold for less than par.

Coupon Rate

The rate of interest a bond pays annually, calculated as a percentage of its face value.