A value of 0.5 that is added to and/or subtracted from a value of x when the continuous normal distribution is used to approximate the discrete binomial distribution is called
a. probability density factor.
b. continuity correction factor.
c. factor of conversion.
d. continuity approximation factor.
b
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Ann has a portfolio of 20 average stocks, and Tom has a portfolio of 2 average stocks. Assuming the market is in equilibrium, which of the following statements is CORRECT?
A. The required return on Ann's portfolio will be lower than that on Tom's portfolio because Ann's portfolio will have less total risk. B. Tom's portfolio will have more diversifiable risk, the same market risk, and thus more total risk than Ann's portfolio, but the required (and expected) returns will be the same on both portfolios. C. If the two portfolios have the same beta, their required returns will be the same, but Ann's portfolio will have less market risk than Tom's. D. The expected return on Jane's portfolio must be lower than the expected return on Dick's portfolio because Jane is more diversified. E. Ann's portfolio will have less diversifiable risk and also less market risk than Tom's portfolio.
Commercial paper is short-term promissory notes issued by large corporations.
Answer the following statement true (T) or false (F)
A state constitutional provision conflicts with a valid federal statute. Under the Supremacy Clause:
A) the federal statute is supreme. B) the state constitutional provision is supreme. C) the federal statute is supreme if Congress has expressly so provided. D) the state constitutional provision is supreme if it expressly so states.
OWB Inc. and Owin Inc. are owned by the same family. OWB's marginal tax rate is 30%, and Owin's marginal tax rate is 21%. OWB has the opportunity to engage in a transaction that will generate $250,000 taxable cash flow. Alternatively, Owin could engage in the transaction. However, Owin would incur an extra $60,000 deductible cash expense with respect to the transaction. Which of the following statements is true?
A. Owin should engage in the transaction because it has the lower marginal tax rate. B. OWB should engage in the transaction to avoid the extra expense. C. Because OWB and Owin are owned by the same family, the family is indifferent as to which corporation engages in the transaction. D. OWB should engage in the transaction to generate $24,900 more after-tax cash flow.