The Cumulative Distribution Function

question 12

Multiple Choice

The cumulative distribution function

• A) Tells us how much of a normal distribution is to the right of any given point.
• B) Tell us how much of a normal distribution is to the left of any given point.
• C) Shows the probability for each possible value of the random variable.
• D) Has the same shape as a normal distribution, but wider tails.

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Definitions:

Annual Inflation Rate

The percentage increase in the price of goods and services over a one-year period, reflecting the decreasing purchasing power of a currency.

Purchasing Power

The measure of what one unit of currency can buy in terms of goods or services.

Compounded Monthly

The practice of calculating interest on the principal and the accumulated interest each month.

Compounded Semiannually

Interest that is calculated and added to the principal balance twice a year.