CFA Practice Question

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CFA Practice Question

Compared to a normal distribution, a lognormal distribution is least likely to be ______.

A. skewed to the left
B. skewed to the right
C. useful in describing the distribution of stock prices
Correct Answer: A

The lognormal distribution is bounded by zero and thus skewed to the right. The lognormal distribution is a good fit for stock prices as stock prices can not fall below zero.

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