A "Continuity Correction Factor" Is Used to Compute Probabilities When

question 73

True/False

A "continuity correction factor" is used to compute probabilities when using the normal distribution to approximate the binomial distribution.

---

Definitions:

Interest Rate Swap

A financial contract between two parties to exchange interest rate payments on a specified principal amount, often used to manage risk or alter interest rate exposure.

Floating Rate

An interest rate that fluctuates over time with the market or an index.

Fixed Rate

An interest rate that remains unchanged throughout the entire term of the loan, mortgage, or bond.

Derivative Security

A financial security whose value is dependent upon or derived from one or more underlying assets.