With a Continuous Probability Distribution

question 32

Multiple Choice

With a continuous probability distribution:

• A) a probability is assigned to each possible outcome.
• B) possible outcomes are constantly changing.
• C) an infinite number of possible outcomes exist.
• D) there is no variance.

---

Definitions:

Inflation Rate

The speed at which the average price of goods and services increases, leading to a decrease in buying power.

Pure Rate

Pure rate, in finance, could refer to the actual interest rate without the influence of inflation or to the risk-free rate of return, which is the theoretical return of an investment with zero risk.

Dividend

A portion of a company's earnings distributed to shareholders, usually in the form of cash or additional shares.

PE Ratio

Price-to-Earnings Ratio; a valuation measure for a company comparing its current share price to its per-share earnings.