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Microsoft® Office Excel® 2007: Data Analysis and Business Modeling, Second Edition by Wayne L. Winston

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Chapter 55. 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 you can use to incorporate uncertainty in business models. The key building block in modeling uncertainty is understanding how to use random variables.

What is a random variable?

  • Any situation whose outcome is uncertain is called an experiment. The value of a random variable is based on the (uncertain) ...

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