Most Frequency Distributions of Income Have the Following Shape

question 1

Multiple Choice

Most frequency distributions of income have the following shape:

• A) rectangular.
• B) normal.
• C) lognormal.
• D) none of the above.

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Definitions:

Coefficient of Variation

A measure indicating the relative variability of a data set by dividing the standard deviation by the mean, often used to assess risks or volatility in finance.

Standard Deviation

A measure of the amount of variation or dispersion of a set of values, used in finance to quantify the risk of an investment.

Unsystematic Risk

A type of risk that affects a very specific group of securities or an individual security and can be mitigated through diversification.

Business-Specific Risk

Also known as unsystematic risk, it refers to the risk associated with a specific sector or company.