The Poisson Distribution Is Closely Related to the Binomial Distribution

question 33

True/False

The Poisson distribution is closely related to the binomial distribution.

---

Definitions:

Financial Engineering

The application of mathematical techniques to solve financial problems, including designing new financial instruments.

Financial Instruments

Contracts that give rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

Bretton Woods Accord

An agreement reached in 1944 that established a new global financial system including fixed exchange rates and created major entities like the International Monetary Fund and the World Bank.

Exchange Rate

The price of one country’s currency expressed in another country’s currency.