If E Is a Random Sample from a Standard Normal

question 19

Multiple Choice

If e is a random sample from a standard normal distribution,which of the following is the change in a Wiener process in time dt .

• A) e times the square root of dt
• B) e times dt
• C) dt times the square root of e
• D) The square root of e times the square root of dt

---

Definitions:

Long-Term U.S. Treasury Bonds

Government bonds with maturities typically longer than 10 years, considered among the safest investment securities.

Market Risk Premium

The excess return that investors require for choosing to invest in the stock market over a risk-free asset.

Index Fund

A type of mutual fund or exchange-traded fund (ETF) designed to follow the returns of a specific market index.

Treasury Bills

Short-term government securities with maturity periods of one year or less, sold at a discount from their face value.