The Distribution of Returns, Measured Over a Short Interval of Time

question 62

Multiple Choice

The distribution of returns, measured over a short interval of time, such as daily returns, is best approximated by the

• A)normal distribution.
• B)lognormal distribution.
• C)binomial distribution.
• D)uniform distribution.

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Definitions:

Marginal Revenue Curve

A graphical representation showing how marginal revenue varies as the quantity of output sold changes, typically downwards sloping for firms in imperfectly competitive markets.

Collude

To cooperate with others, often secretly, to deceive or gain an unfair advantage in the market.

Market Demand

Market demand is the total quantity of a good or service that all consumers are willing to purchase at various prices within a specific time period.

Economic Profits

Earnings that exceed the total costs of production, including both explicit and implicit costs, indicating an above-normal return on investment.