- CFA Exams
- CFA Level I Exam
- Topic 1. Quantitative Methods
- Learning Module 4. Common Probability Distributions
- Subject 1. Introduction and Discrete Random Variables

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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.

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**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. |