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      Question

      What is a 'normal

      distribution'?
      A The distribution of categorical variables in a balanced dataset Correct Answer Incorrect Answer
      B A skewed distribution used specifically for modelling financial returns Correct Answer Incorrect Answer
      C A distribution where all values have equal probability of occurring Correct Answer Incorrect Answer
      D A symmetric, bell-shaped probability distribution Correct Answer Incorrect Answer
      E A discrete distribution used for counting rare events like fraud occurrences Correct Answer Incorrect Answer

      Solution

      Normal distribution N(μ, σ²) is Bell-shaped and perfectly symmetric around μ. Mean = Median = Mode (at the peak). 68% of data in such distribution is within μ ± 1σ, 95% within μ ± 2σ and 99.7% within μ ± 3σ. 

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