 Financial Terms Probability density function

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# Definition of Probability density function ## Probability density function

The probability function for a continuous random variable.

# Related Terms:

## Aggregate Production Function

An equation determining aggregate output as a function of aggregate inputs such as labor and capital.

## Base probability of loss

The probability of not achieving a portfolio expected return.

## Consumption Function

The relationship between consumption demand and disposable income. More generally, it refers to the relationship between consumption demand and all factors that affect this demand.

## Cumulative probability distribution

A function that shows the probability that the random variable will
attain a value less than or equal to each value that the random variable can take on.

## functional classification

a separation of costs into groups based on the similar reason for their incurrence; it includes
cost of goods sold and detailed selling and administrative
expenses

## Normal probability distribution

A probability distribution for a continuous random variable that is forms a
symmetrical bell-shaped curve around the mean.

## objective function

the linear mathematical equation that
states the purpose of a linear programming problem ## Probability

The relative likelihood of a particular outcome among all possible outcomes.

## Probability distribution

Also called a probability function, a function that describes all the values that the random variable can
take and the probability associated with each.

## Probability Distribution

A list of all possible outcomes and the chance of each outcome
occurring

## probability distribution

a range of possible values for which each value has an assigned likelihood of occurrence

## Probability function

A function that assigns a probability to each and every possible outcome.

## Utility function

A mathematical expression that assigns a value to all possible choices. In portfolio theory the
utility function expresses the preferences of economic entities with respect to perceived risk and expected return.

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