Folder:

115 CFA

File:

115.020.40.04 Reading 9 - 4. The Discrete Uniform Distribution

# 4. The Discrete Uniform Distribution

## e. define a discrete uniform random variable, a Bernoulli random variable, and a binomial random variable;

## f. calculate and interpret probabilities given the discrete uniform and the binomial distribution functions;

## g. construct a binomial tree to describe stock price movement;

## h. calculate and interpret tracking error;

## i. define the continuous uniform distribution and calculate and interpret probabilities, given a continuous uniform distribution;

What is a uniform distribution?

Uniform distribution is one which has the same probability of occurrence for all values of `X`

. Also sometimes called a rectangular distribution.

What is a good example of a uniform distribution?

When flipping a coin, you have an equal chance of getting a heads or tails. When throwing a die you have an equal chance of getting 1-6. All outcomes are equally probable.

What is a discrete uniform distribution?

It is a distribution that has a finite number of possible outcomes and each outcome is equally likely. Like throwing a die.

##### Source:

- CFA