The Area Under the Curve of a Valid Continuous Probability

question 133

Multiple Choice

The area under the curve of a valid continuous probability distribution must ____________.

• A)Equal 1
• B)Be between 0 and 1
• C)Be infinite
• D)Be less than 1

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Definitions:

Real Interest Rates

Interest rates adjusted for inflation, showing the real cost of borrowing or the real yield on savings.

Real Exchange Rate

An adjusted exchange rate between two currencies that reflects the purchasing power of the two currencies; it factors in the relative prices of a standard set of goods and services in each country.

U.S. Dollar

The official currency of the United States, widely used as a benchmark in international financial transactions.

Domestic Investment

Refers to the total capital investment in an economy by its residents and businesses, excluding investments in foreign assets.