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What Is the Purpose of Using the Continuity Correction Factor

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What is the purpose of using the continuity correction factor when approximating the binomial distribution with a normal distribution?


Definitions:

Securities

Financial instruments that represent an ownership position in a corporation (stock), a creditor relationship with a governmental body or a corporation (bond), or rights to ownership as represented by an option.

Shareholders' Best Interest

The principle that company management should operate in a way that enhances the value received by shareholders.

Proxy Fights

A strategy utilized by shareholders to influence a corporation's management and policies by attempting to vote in favor of their own proposals.

Threat of Takeover

A situation where a company is at risk of being acquired by another, which often influences its stock price and corporate strategies.

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