CFA Level I · CFA Level I Exam · Statistical Distributions for Financial Asset Prices and Returns
A discrete uniform random variable can take any of the integer values 1, 2, 3, 4, 5 or 6, each with the same probability. The probability that the variable takes a value of 4 or less is closest to:
The probability is about 0.667. Six equally likely outcomes each have probability 1/6, and four of them (1 through 4) satisfy the condition, so the probability is 4/6, which is 0.667 when rounded to three decimals.
- A0.500
- B0.667Correct
- C0.833
Explanation
Each of the six outcomes has probability 1/6. Values 1, 2, 3 and 4 are four outcomes, so the probability is 4/6 = 0.667. The 0.833 option counts five outcomes by mistake, and 0.500 counts only three.
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