The distribution of annual returns for stocks is more closely related to the normal distribution than the lognormal distribution.

Name: The distribution of annual returns for stocks is more closely related to the normal distribution than the lognormal distribution.
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The distribution of annual returns for stocks is more closely related to the lognormal distribution because stock prices cannot be negative, and the lognormal distribution accounts for this by modeling the multiplicative nature of returns.

The Distribution of Annual Returns for Stocks Is More Closely