The Student T Distribution

question 12

Multiple Choice

The Student t distribution:

• A)is symmetrical.
• B)approaches the normal distribution as the degrees of freedom increase.
• C)has more area in the tails than the standard normal distribution does.
• D)All of these choices are true.

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Definitions:

Periodic Bond Interest

Regular interest payments made to bondholders during the life of a bond.

Present Value

The current value of a future sum of money or stream of cash flows given a specified rate of return, used in discounting and investment appraisal.

Bond Discount Account

An accounting term representing the difference between the face value of a bond and its selling price when sold at less than its face value.

Serial Bonds

Bonds that mature at different intervals over a period of time, allowing the issuer to retire a portion of the bond issue at regular intervals.