Chapter 13
You’re the Only Variable for Me: Univariate Statistical Techniques
In This Chapter
Understanding the properties of discrete probability distributions: the binomial and Poisson
Exploring continuous probability distributions: the normal, Student’s t, lognormal, chi-square, and F
Implementing statistical tests of randomness
Chapter 4 introduces the notion of a probability distribution. You use a probability distribution to describe the properties of a random variable. A random variable is actually a function — it assigns numerical values to the outcomes of a random process. For example, you might define a random variable as “the return to Apple stock over the coming trading day” or “the number of bonds in a portfolio that default over the coming year.”
The two basic types of probability distributions you may encounter in statistics are discrete distributions and continuous distributions:
- A discrete distribution is one for which every outcome has a positive probability.
- A continuous distribution assigns probabilities to ranges of values.
For example, the distribution of bonds that default over the coming year would be discrete, because every bond has a distinct probability ...
Get Statistics for Big Data For Dummies now with the O’Reilly learning platform.
O’Reilly members experience books, live events, courses curated by job role, and more from O’Reilly and nearly 200 top publishers.
