Definition of Probability distribution:
A function of a discrete variable whose integral over any interval is the probability that the random variable specified by it will lie within that interval.
A probability distribution is a statistical function that describes all the possible values and likelihoods that a random variable can take within a given range. This range will be bounded between the minimum and maximum possible values, but precisely where the possible value is likely to be plotted on the probability distribution depends on a number of factors. These factors include the distribution's mean (average), standard deviation, skewness, and kurtosis.
Perhaps the most common probability distribution is the normal distribution, or "bell curve," although several distributions exist that are commonly used. Typically, the data generating process of some phenomenon will dictate its probability distribution. This process is called the probability density function.
Listing of all possible events or outcomes associated with a course of action, and their probabilities (see probability).
How to use Probability distribution in a sentence?
- Investors use probability distributions to anticipate returns on assets such as stocks over time and to hedge their risk.
- Probability distributions come in many shapes with different characteristics, as defined by the mean, standard deviation, skewness, and kurtosis.
- The error terms from the regression equations are modeled as random variables with a probability distribution.
- A probability distribution depicts the expected outcomes of possible values for a given data generating process.
Meaning of Probability distribution & Probability distribution Definition