A Probability Distribution Shows the Probability Values for the Occurrence

question 32

True/False

A probability distribution shows the probability values for the occurrence of the outcomes of an experiment.A probability distribution that has a bell-shaped curve is called a normal distribution.

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Definitions:

Zero Correlation

A statistical term indicating no linear relationship between two variables, meaning one variable does not predict the movement of the other.

Equity Tranche

The portion of a structured finance instrument that is first to absorb losses and last to receive payments.

Default

Failure to fulfill a legal obligation, especially failure to meet a debt payment or not fulfilling a contract condition.

Collateralized Debt Obligation

A complex structured finance product that pools together cash flow-generating assets and repackages them into tranches for sale to investors.