CFA Practice Question

There are 294 practice questions for this study session.

CFA Practice Question

The distribution of a high-risk stock would tend to be ______.

A. peaked
B. normal
C. skewed
D. flat
E. lognormal
Correct Answer: D

A flat distribution means that there is a wide set of possible outcomes and the most risk.

User Contributed Comments 9

User Comment
myanmar i thougt it would be peaked because of fat tailes
akanimo peaked cant be right because that means that the majority of the area under the curve will be at a central point and the tails would be very thin (low probabilities) ... this would point more to low volatility which is low risk
alki risky stock means higher stnd deviation, higher the deviation from the mean, flatter the distribution
fahad Good one Alki
BigJimStud more peaked = less distribution from the mean
more flat = more distribution away from the mean
loisliu88 what about skewed.
bantoo It is really a very smart question.
johntan1979 Very easy to understand if you can imagine flat distribution as the possibility of getting -100% to +infinity returns ==> super high risk.
jonan203 ie. platykurtic
You need to log in first to add your comment.