What is the 'Binomial Distribution'
The binomial distribution is a probability distribution that summarizes the likelihood that a value will take one of two independent values under a given set of parameters or assumptions. The underlying assumptions of the binomial distribution are that there is only one outcome for each trial, that each trial has the same probability of success and that each trial is mutually exclusive.
BREAKING DOWN 'Binomial Distribution'
A binomial distribution summarizes the number of trials, or observations, when each trial has the same probability of attaining one particular value.
For example, flipping a coin would create a binomial distribution. This is because each trial can only take one of two values (heads or tails), each success has the same probability (i.e. the probability of flipping a head is 0.50) and the results of one trial will not influence the results of another.

Multinomial Distribution
A distribution that shows the likelihood of the possible results ... 
Phase 3
The final phase of clinical trials for an experimental new drug, ... 
Binomial Option Pricing Model
An options valuation method developed by Cox, et al, in 1979. ... 
Trial Balance
A bookkeeping worksheet in which the balances of all ledgers ... 
Probability Distribution
A statistical function that describes all the possible values ... 
Clinical Trials
A study of human volunteers that evaluates the safety and efficacy ...

Technical Indicators
Basics Of The Binomial Distribution
Despite the fancysounding name, you already understand the Binomial Distribution, and you can use it to make money. Ready? Read on. 
Bonds & Fixed Income
ESOs: Using the Binomial Model
By David Harper On April 1, 2004, the Financial Accounting Standards Board (FASB) published a proposal on the new accounting treatment of employee stock options ESOs. The final rules will probably ... 
Options & Futures
Breaking Down The Binomial Model To Value An Option
Find out how to carve your way into this valuation model niche. 
Professionals
Common Probability Distribution Calculations
CFA Level 1  Common Probability Distributions  Calculations 
Fundamental Analysis
Find The Right Fit With Probability Distributions
Discover a few of the most popular probability distributions and how to calculate them. 
Investing
What's a Trial Balance?
A trial balance is a worksheet listing the debit or credit balances of all the ledger accounts for an entity. Under accounting theory, the total of all the debits must equal the total of all ... 
Fundamental Analysis
Examples To Understand The Binomial Option Pricing Model
Binomial option pricing model, based on risk neutral valuation, offers a unique alternative to BlackScholes. Here are detailed examples with calculations using Binomial model and explanation ... 
Options & Futures
Using Decision Trees In Finance
These decisionmaking tools play an integral role in corporate finance and economic forecasting. 
Fundamental Analysis
Scenario Analysis Provides Glimpse Of Portfolio Potential
This statistical method estimates how far a stock might fall in a worstcase scenario. 
Professionals
Scenario / WhatIf Analysis
We look at some ways that you can evaluate your project.

What does it mean when a drug is in clinical trials and how long does it take to ...
Consider the fact that most drugs take years to get through the clinical trial process before investing in cuttingedge pharmaceutical ... Read Answer >> 
What's the difference between a trial balance and an adjusted trial balance?
See the difference between a trial balance and an adjusted trial balance, and understand the importance of making the appropriate ... Read Answer >> 
What's the difference between a trial balance and a balance sheet?
Discover what is included in a trial balance and a balance sheet, and learn about what sets these two accounting reports ... Read Answer >> 
What is the average return on equity for a company in the electronics sector?
Learn about the BlackScholes option pricing model and the binomial options model, and understand the advantages of the binomial ... Read Answer >> 
What is the best software for calculating trial balances?
Learn why a detailed trial balance report is crucial to any business and why standalone software may provide better results ... Read Answer >> 
Is there short selling in China?
The Chinese stock market has no history of short sales. However, in 2007, the Chinese government, in an effort to increase ... Read Answer >>