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Microsoft® Excel Data Analysis and Business Modeling by Wayne L. Winston

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Chapter 53. An Introduction to Random Variables

  • 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 enable you to incorporate uncertainty in business models. The key building block in modeling uncertainty is an understanding of how to use random variables.

What is a random variable?

Any situation whose outcome is uncertain is called an experiment. A random variable is a function that associates ...

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