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L1 09 Common Probability Distributions

This class was created by Brainscape user Steven Popovic. Visit their profile to learn more about the creator.

By: Steven Popovic
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Decks in this class (20)

Common Probability Distributions
Define probability distribution 1,
Distinguish between discrete and ...,
Describe the set range of possibl...
29  cards
9 A Probability Dist. Cont V. Discreet Random Variable + Prob Functions
Define a discreet random variable...,
Define a probability distribution 1,
Define a continuous random variab...
5  cards
a define a probability distribution and distinguish between discrete and continuous random variables and their probability functions;
0  cards
b describe the set of possible outcomes of a specified discrete random variable;
0  cards
c interpret a cumulative distribution function;
0  cards
d calculate and interpret probabilities for a random variable, given its cumulative distribution function;
0  cards
e define a discrete uniform random variable, a Bernoulli random variable, and a binomial random variable;
0  cards
f calculate and interpret probabilities given the discrete uniform and the binomial distribution functions;
0  cards
g construct a binomial tree to describe stock price movement;
0  cards
h calculate and interpret tracking error;
0  cards
i define the continuous uniform distribution and calculate and interpret probabilities, given a continuous uniform distribution;
0  cards
j explain the key properties of the normal distribution;
0  cards
k distinguish between a univariate and a multivariate distribution, and explain the role of correlation in the multivariate normal distribution;
0  cards
l determine the probability that a normally distributed random variable lies inside a given interval;
0  cards
m define the standard normal distribution, explain how to standardize a random variable, and calculate and interpret probabilities using the standard normal distribution;
0  cards
n define shortfall risk, calculate the safety-first ratio, and select an optimal portfolio using Roy’s safety-first criterion;
0  cards
o explain the relationship between normal and lognormal distributions and why the lognormal distribution is used to model asset prices;
0  cards
p distinguish between discretely and continuously compounded rates of return, and calculate and interpret a continuously compounded rate of return, given a specific holding period return;
0  cards
q explain Monte Carlo simulation and describe its major applications and limitations;
0  cards
r compare Monte Carlo simulation and historical simulation.
0  cards

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L1 09 Common Probability Distributions

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