The Distribution of Daily Returns for Stocks Is More Closely

question 73

True/False

The distribution of daily returns for stocks is more closely related to the lognormal distribution than the normal distribution.

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Definitions:

Economies of Scale

The cost advantage achieved when production becomes efficient, as the scale of production increases, leading to a reduction in the average cost to make each unit.

Diseconomies of Scale

A situation where, as a firm becomes larger, its costs per unit increase due to inefficiencies that arise from its growth.

Constant Costs

The costs that remain unchanged as the level of output or production increases or decreases.