Strategic Risk Taking: A Framework for Risk Management

Appendix 6.1: Statistical Distributions

Every statistics book provides a listing of statistical distributions with their properties, but browsing through these choices can be frustrating to anyone without a statistical background, for two reasons. First, the choices seem endless, with dozens of distributions competing for our attention, with little or no intuitive basis for differentiating between them. Second, the descriptions tend to be abstract and emphasize statistical properties such as the moments, characteristic functions, and cumulative distributions. In this appendix, we will focus on the aspects of distributions that are most useful when analyzing raw data and trying to fit the right distribution to that data.

Fitting the Distribution ...