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Relative frequency and subjective approach

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(a) Assume that the returns on the stock can be modeled using a uniform probability distribution with a minimum of 2.5% and a maximum of 5.5%. Calculate the probability that the return in the next period will be between 2.5% and 3.5%.

(b) What is the difference between the relative frequency and subjective approach to calculating probabilities?

(c) What is the difference between an exchange rate that appreciates and depreciates and one that revalues and devalues?

Reference no: EM132685280

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