Question

Which of the following is true regarding probability distributions?

The flatter the probability distribution, the less risk is involved.

The returns of a Treasury bond have a vertical line for a probability distribution.

The returns of a Treasury bond have a horizontal line for a probability distribution.

The further away something is from the mean, the more likely it is to occur.

None of the answers are correct.

Answer 1

Answer is: The returns of a Treasury bond have a vertical line for a probability distribution.

The flatter the probability distribution, the less risk is involved. - FALSE since more flatter means more standard deviation means more risk.
The returns of a Treasury bond have a vertical line for a probability distribution.- TRUE since they have almost zero risk (0 standard deviation).
The returns of a Treasury bond have a horizontal line for a probability distribution.- FALSE since they have almost zero risk (0 standard deviation).
The further away something is from the mean, the more likely it is to occur.- Obvioulsy FALSE.

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