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Truncated Distribution
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A Truncated Probability Distribution Typically arising in the context of options analysis, a distribution (for example, the terminal value of the option) that obtains when some underlying distribution (price of the underlying asset) is transformed in such a way that values beyond a particular point (the exercise price) are replaced by values that occur precisely at that point. In the case of a put option the upper tail of the distribution of price is replaced by a 'spike' at the exercise price.
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