DEFINITION of 'Multinomial Distribution '
A distribution that shows the likelihood of the possible results of a experiment with repeated trials in which each trial can result in a specified number of outcomes that is greater than two. A multinomial distribution could show the results of tossing two dice, because each die can land on one of six possible values. By contrast, the results of a coin toss would be shown using a binomial distribution because there are only two possible results of each toss, heads or tails.
BREAKING DOWN 'Multinomial Distribution '
Two additional key characteristics of a multinomial distribution are that the trials it illustrates must be independent (e.g., in the dice experiment, rolling a five does not have any impact on the number that will be rolled next) and the probability of each possible result must be constant (e.g., on each roll, there is a one in six chance of any number on the die coming up).

Uniform Distribution
In statistics, a type of probability distribution in which all ... 
Phase 3
The final phase of clinical trials for an experimental new drug, ... 
Probability Distribution
A statistical function that describes all the possible values ... 
Chi Square Statistic
A measurement of how expectations compare to results. The data ... 
Normal Distribution
A probability distribution that plots all of its values in a ... 
Clinical Trials
A study of human volunteers that evaluates the safety and efficacy ...

Investing
Find The Right Fit With Probability Distributions
Discover a few of the most popular probability distributions and how to calculate them. 
Investing
Create a Monte Carlo Simulation Using Excel
How to apply the Monte Carlo Simulation principles to a game of dice using Microsoft Excel. 
Trading
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. 
Investing
What Are The Odds Of Scoring A Winning Trade?
Just because you're on a winning streak doesn't mean you're a skilled trader. Find out why. 
Investing
What a Normal Distribution Means
Normal distribution describes a symmetrical data distribution, where most of the results lie near the mean. 
Investing
Monte Carlo Simulation With GBM
Learn to predict future events through a series of random trials. 
Markets
Financial Markets: Random, Cyclical Or Both?
Are the markets random or cyclical? It depends on who you ask. Here, we go over both sides of the argument. 
Managing Wealth
Using Normal Distribution Formula To Optimize Your Portfolio
Normal or bell curve distribution can be used in portfolio theory to help portfolio managers maximize return and minimize risk. 
Trading
Bet Smarter With The Monte Carlo Simulation
This technique can reduce uncertainty in estimating future outcomes. 
Trading
Lognormal and Normal Distribution
When and why do you use lognormal distribution or normal distribution for analyzing securities? Lognormal for stocks, normal for portfolio returns.

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 >> 
Can I replace the $7,000 in Jan 2016 and avoid paying taxes on the $7,000 excess ...
I closed an IRA account in Jan 2015 and received $9,000. I forgot that and withdrew my required $7,000 minimum distribution ... 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 >> 
I have an IRA with aftertax money in it. How do I avoid being taxed again?
... Read Answer >> 
Can I elect to NOT have income tax withheld from an IRA (NOT ROTH) distribution before ...
... Read Answer >>