Which distribution is a list of the possible dollar returns from the investment together with the probability of each return?
A)Normal distribution.
B)Probability distribution.
C)Both Normal distribution and Probability distribution.
D)utility function.

Question

Quizplus · Accepted Answer

A probability distribution is a mathematical function that lists all the possible outcomes of a random variable and the probabilities associated with each outcome. In this case, the random variable is the dollar return from the investment, and the probability distribution will list all the possible returns and their respective probabilities. The normal distribution is a specific type of probability distribution, but not all probability distributions are normal. The utility function, on the other hand, is a mathematical function that measures the satisfaction or preference that a decision-maker has for different outcomes, and is not directly related to the probability distribution of the investment returns. Therefore, the best choice in this case is B, probability distribution.

Which Distribution Is a List of the Possible Dollar Returns