CFA Practice Question

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CFA Practice Question

Consider the following statements:

I. The lognormal distribution is widely used for modeling the probability distribution of stock and other asset prices.
II. A random variable, Y, follows a lognormal distribution if its natural logarithm is normally distributed.
III. The lognormal distribution is described by the mean and standard deviation of its associated normal distribution.

Which of the following are true?
A. II and III
B. I and III
C. I, II and III
Explanation: These statements are all correct.

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