Question 714 return distribution, no explanation
Which of the following quantities is commonly assumed to be normally distributed?
(a) Prices, P1.
(b) Gross discrete returns per annum, rgdr 0 → 1=P1P0.
(c) Effective annual returns per annum also known as net discrete returns, reff 0 → 1=P1−P0P0=P1P0−1.
(d) Continuously compounded returns per annum, rcc 0 → 1=ln(P1P0).
(e) Annualised percentage rates compounding per month, rapr comp monthly 0 → 1 mth=(P1−P0P0)×12.