If the Random Variable X Is Exponentially Distributed, Then Which

question 40

Multiple Choice

If the random variable X is exponentially distributed, then which of the following statements best describes the mean of X?

• A)The mean of X will be greater than the standard deviation of X.
• B)The mean of X will be smaller than the standard deviation of X.
• C)The mean of X will equal the standard deviation of X.
• D)None of these choices are correct.

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Definitions:

Exercise Price

The specified price at which the holder of an option can buy (in the case of a call option) or sell (in the case of a put option) the underlying asset.

Time To Expiration

The period remaining until the expiration date of a contract, such as an option or futures contract.

Stock Price

The cost of purchasing a share of a company, which can fluctuate based on market conditions.

Intrinsic Value

The actual, inherent value of a financial security, determined through fundamental analysis without reference to its market value.