A lognormal distribution is appropriate for modeling:
✓ Correct Answer: Option B
Asset prices are bounded at zero and skewed right—lognormal captures this. If ln(price) is normal, price is lognormal.
📚 About This CFA Exam Prep Practice Question
This 2-level CFA Exam Prep question from the Quantitative Methods topic is part of BrainForge Quiz's free exam preparation library. Each question includes the correct answer and a detailed explanation to help you understand the underlying concept, not just memorize the answer.
How to use this page: Read the question above, consider all four options (A through D), then check the highlighted correct answer and explanation. For active timed practice, start a free CFA Exam Prep practice test or use flashcards for spaced repetition review.