Fight Finance

(a) A normally distributed variable’s mean, median and mode are all expected to be equal.

(b) A log-normally distributed variable’s mean, median and mode are all expected to be different. Mean > median > mode.

(c) Future stock prices ##(P_t )## are often assumed to be log-normally distributed.

(d) Stocks’ annual net discrete returns ##(P_t/P_0-1)## must be normally distributed when stock prices ##(P_t)## are log-normally distributed.

(e) The total area under a probability density function (pdf) is always one.