Chapter 62. An Introduction to Random Variables

Questions answered in this chapter:

  • What is a random variable?

  • What is a discrete random variable?

  • What are the mean, variance, and standard deviation of a random variable?

  • What is a continuous random variable?

  • What is a probability density function?

  • What are independent random variables?

In today’s world, the only thing that’s certain is that we face a great deal of uncertainty. In the next nine chapters, I’ll give you some powerful techniques that you can use to incorporate uncertainty in business models. The key building block in modeling uncertainty is understanding how to use random variables.

Answers to This Chapter’s Questions

What is a random variable?

Any situation whose outcome is uncertain is called ...

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