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Probability Distribution |
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Definition of Probability DistributionProbability DistributionA list of all possible outcomes and the chance of each outcome probability distributiona range of possible values for which each value has an assigned likelihood of occurrence Probability distributionAlso called a probability function, a function that describes all the values that the random variable can
Related Terms:Cumulative probability distributionA function that shows the probability that the random variable will Normal probability distributionA probability distribution for a continuous random variable that is forms a Expected returnThe return expected on a risky asset based on a probability distribution for the possible rates Expected valueThe weighted average of a probability distribution. Monte Carlo simulationAn analytical technique for solving a problem by performing a large number of trail Normal random variableA random variable that has a normal probability distribution. Random walkTheory that stock price changes from day to day are at random; the changes are independent Skewed distributionprobability distribution in which an unequal number of observations lie below and total expected value (for a project)the sum of the individual cash flows in a probability distribution multiplied by their related probabilities Base probability of lossThe probability of not achieving a portfolio expected return. Distribution centerA branch warehouse containing finished goods and service distribution costa cost incurred to warehouse, transport, or deliver a product or service Distribution inventoryInventory intended for shipment to customers, usually DistributionsPayments from fund or corporate cash flow. May include dividends from earnings, capital Frequency distributionThe organization of data to show how often certain values or ranges of values occur. Lognormal distributionA distribution where the logarithm of the variable follows a normal distribution. Normal (bell-shaped) distributionIn statistics, a theoretical frequency ProbabilityThe relative likelihood of a particular outcome among all possible outcomes. Probability density functionThe probability function for a continuous random variable. Probability functionA function that assigns a probability to each and every possible outcome. Standardized normal distributionA normal distribution with a mean of 0 and a standard deviation of 1. Binomial modelA method of pricing options or other equity derivatives in
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