Does the table show a probability distribution?
a) Yes, the table shows a probability distribution. Find the mean of the random variable x. Select the correct choice below and, if necessary, fill in the answer box to complete your choice. Find the standard deviation of the random variable x. Select the correct choice below and, if necessary, fill in the answer box to complete your choice.
What to do if a probability distribution is not given?
If a probability distribution is not given, identify the requirements that are not satisfied. Does the table show a probability distribution? Select all that apply. a) Yes, the table shows a probability distribution.
What if the stock closes below $20 on December 15?
If the stock closes below $20 on Dec. 15, the option will be worth nothing. If it closes between $20 and $30 inclusive, on Dec. 15, the option will be worth $200.
What are some examples of the probability distribution equation?
Given below are the examples of the probability distribution equation to understand it better. Let’s suppose a coin was tossed twice, and we have to show the probability distribution of showing heads. In the given an example, possible outcomes could be (H, H), (H, T), (T, H), (T, T)
Probability Distribution Formula
The probability of occurring event can be calculated by using the below formula;
Examples of Probability Distribution Formula (with Excel Template)
Given below are the examples of the probability distribution equation to understand it better.
Relevance and Uses
A probability distribution is basically used for recording the possibility of occurrence or non-occurrence of a certain event. From a business point of view, it can also be used for predicting or estimating the possible future returns or profitability of the business.
Recommended Articles
This has been a guide to Probability Distribution and its meaning. Here we discuss the formula to calculate probability distribution along with practical examples and a downloadable excel template. You can learn more from the following articles –
What is a probability distribution?
For a given random variable, its probability distribution is a function that shows all the possible values it can take. It is confined to a certain range derived from the statistically possible maximum and minimum values. Distributions can be of two types: discrete and continuous. Discrete distributions show only specific values within a given range. A random variable following a continuous distribution can take any value within the given range. Tossing a coin has two possible outcomes and is thus an example of a discrete distribution. A distribution of the height of adult males, which can take any possible value within a stated range, is a continuous probability distribution.
What are the two types of distributions?
Distributions can be of two types: discrete and continuous. Discrete distributions show only specific values within a given range. A random variable following a continuous distribution can take any value within the given range. Tossing a coin has two possible outcomes and is thus an example of a discrete distribution.
What is expected return theory?
that can take any values within a given range. The expected return is based on historical data, which may or may not provide reliable forecasting of future returns. Hence, the outcome is not guaranteed.
Is tossing a coin a discrete distribution?
Tossing a coin has two possible outcomes and is thus an example of a discrete distribution. A distribution of the height of adult males, which can take any possible value within a stated range, is a continuous probability distribution. Expected Return.
Is expected return a predictor of stock performance?
Although not a guaranteed predictor of stock performance, the expected return formula has proven to be an excellent analytical tool that helps investors forecast probable investment returns and assess portfolio risk and diversification.