I the Total Area Within Any Continuous Probability Distribution Is

question 104

Multiple Choice

i. The total area within any continuous probability distribution is equal to 1.00. ii. For any continuous probability distribution, the probability, P(x) , of any value of the random variable, X, can be computed.
iii. For any discrete probability distribution, the probability, P(x) , of any value of the random variable, X, can be computed.

• A) (i), (ii), and (iii) are all correct statements.
• B) (i) is a correct statement but not (ii) or (iii).
• C) (i) and (iii) are correct statements but not (ii).
• D) (ii) and (iii) are correct statements but not (i).
• E) (i), (ii), and (iii) are all false statements.

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Definitions:

Present Value Factors

Financial multipliers used to calculate the present value of a future amount of money or stream of cash flows based on a specific discount rate.

Interest Revenue

Income earned on investments, loans, or accounts receivable that is generated from the interest charged.

Annual Return

The percentage of increase or decrease in the value of an investment over a one-year period, including dividends and appreciation.

Direct Financing Lease

A type of lease where the lessor records receivables equal to the net investment in the lease and recognizes income from interest over the lease term.