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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.

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