All of the Following Statements Are True of the Normal

question 7

Multiple Choice

All of the following statements are true of the normal distribution EXCEPT

• A) the mean and median coincide.
• B) the most common scores lie near the mean.
• C) the more rare the score is, the further from the mean it lies.
• D) nearly all the scores lie outside of two standard deviations of the mean.

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Definitions:

Compounded Monthly

Refers to the process of applying interest to a principal sum so that each month's interest earnings also earn interest in subsequent months.

Effective Yield

Effective yield refers to the total yield an investor receives, in terms of interest or dividends, after the costs of investments are accounted for, often expressed as an annual percentage.

Decimal Places

The digits located after the decimal point in a number, representing parts of ten.

Compounded Continuously

Compounded continuously refers to the calculation of interest earned on an investment or loan where the interest is added perpetually at every possible moment, following the formula \(A = Pe^{rt}\), where \(A\) is the amount, \(P\) the principal, \(r\) the rate, and \(t\) the time.