Generally assume that stock returns are normally distributed

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In finance, we generally assume that stock returns are normally distributed. Which of the following are common reasons for why this assumption is flawed: I. Stock return exhibit skewness and returns II. Stock returns are a good predictor of future returns III. Stock returns are truncated at -100% IV. The average equity risk premium is 7.2% a. I only b. I and II only c. II and III only d. II and IV only.

Reference no: EM131853660

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