02 February 2016 9 1K Report

It is known that the stock prices or value of other financial instruments has its own tick size and so they are discrete variable in nature. But I read that the returns of stock market is a continuous variable and not sure how?

Because, the return is the difference of the same stock price. so, still it is the difference of the tick size which also remains to be a certain number. So how could a stock returns becomes a continuous variable.

source where i read stock returns are continuous: http://financial-dictionary.thefreedictionary.com/Discrete+random+variable

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