Which of the Following Is an Example of a Discrete

question 70

Multiple Choice

Which of the following is an example of a discrete random variable?

• A)The distance you can drive in a car with a full tank of gas.
• B)The number of cows on a cattle ranch.
• C)The weight of a package at the post office.
• D)The amount of rain that falls over a 24-hour period.

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Definitions:

Discount Rate

The interest rate used to discount future cash flows to their present value, essentially reflecting the opportunity cost of capital.

Present Value

The up-to-date valuation of a future financial sum or cash flow sequence, considering a determined rate of return.

Present Value Factor

A factor used to calculate the present value of a future amount of money or stream of payments, based on a specific rate of return.

Discount Factor

A multiplicative factor used to calculate the present value of future cash flows or income streams, reflecting the time value of money.