In the Basic Queuing Model (M/M/1), What Probability Distribution Describes

question 3

Multiple Choice

In the basic queuing model (M/M/1) , what probability distribution describes service times?

• A) binomial
• B) negative exponential
• C) Poisson
• D) normal
• E) lognormal

Understand the fundamental definitions and functions of various derivative contracts including futures, options, and swaps.

Recognize the processes and outcomes of hedging strategies using derivative securities.

Identify the differences between forward contracts and options, and their respective valuation mechanisms.

Understand the role and operation of swap dealers within the derivatives market.

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Definitions:

Hidden Information

Circumstances in which one party in a transaction has access to more or better information than the other party, potentially leading to an imbalance in decision-making or exploitation.

Moral Hazard

A situation where one party is more likely to take risks because another party bears the cost of those risks.

All-You-Can-Eat Buffets

Dining establishments offering customers the opportunity to eat unlimited amounts of food for a fixed price.

Heavier

Describes an object that has a greater weight compared to another object or relative to what is typical.