CFA Level I · CFA Level I Exam · Statistical Distributions for Financial Asset Prices and Returns
A continuous uniform random variable X is distributed between 20 and 60. The probability that X falls between 35 and 50 is closest to:
The probability is about 0.375. For a continuous uniform distribution, the probability of an interval equals its length divided by the total range. The interval is 15 wide and the full range is 40 wide, so 15/40 equals 0.375.
- A0.250
- B0.375Correct
- C0.500
Explanation
For a continuous uniform distribution, P(a ≤ X ≤ b) = (b − a)/(upper − lower). Here (50 − 35)/(60 − 20) = 15/40 = 0.375. Using 0.500 would come from dividing by 30, the wrong width.
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