CFA Practice Question

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CFA Practice Question

A quoted stock price quoted in ticks of $0.01 is an example of a ______.
A. discrete random variable
B. continuous random variable
C. cumulative distribution function
Explanation: A quoted stock price quoted in ticks of $0.01 is an example of a discrete random variable.

User Contributed Comments 5

User Comment
dimanyc because there's limited number of variables.
EtnicPlaymaker Incorrect question. Upside growth potential of stock is not limited. Number of possible outcomes is unlimited.
P( x = particular value ) -> 0
It can be aproximated by continuous random variable.
siramarc EtnicPlaymaker:

although the price can be as high as you want it to be, it is still a discrete random variable: i.e. you cannot have a price of 5.000001.
MattNYC I knew this was a discrete number, but I chose B because i thought discrete #'s can't be decimals. I suppose they can when they cannot go to infinity, as is the case in this question.
leftcoast MattNYC - discrete random variables can go to infinity, the difference is that unlike continuous, they are countable.
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