Investopedia

Probability Density Function - PDF

Filed Under » ,
Dictionary Says

Definition of 'Probability Density Function - PDF'

A statistical measure that defines a probability distribution for a random variable and is often denoted as f(x). When the PDF function is graphically portrayed, the area under the graph will indicate the interval under which the variable with fall.
Investopedia Says

Investopedia explains 'Probability Density Function - PDF'

The probability density function is often used in the creation of financial and economic modeling for forecasting purposes. More specifically, the PDFs of futures exchange rates and equity prices can be employed in models in order to get a more complete picture regarding future market sentiment.

Articles Of Interest

  1. Why The Consumer Price Index Is Controversial

    Find out why economists are torn about how to calculate inflation.
  2. Find The Highest Returns With The Sharpe Ratio

    Learn how to follow the efficient frontier to increase your chances of successful investing.
  3. Quants: The Rocket Scientists Of Wall Street

    Blend math, finance and computer skills to command a high - and well deserved - salary.
  4. Uncovering Oil And Gas Futures

    Find out how to stay on top of data reports that could cause volatility in oil and gas markets.
  5. Trading Is Timing

    Learn how to make gains even if you don't get in at the right time.
  6. Leading Economic Indicators Predict Market Trends

    Leading indicators help investors to predict and react to where the market is headed.
  7. Exploring Non-Dollar Currencies For Forex Trading

    Learn how investments in foreign currencies can diversify your portfolio.
  8. Candlestick Charting: What Is It?

    Discover the components and basic patterns of this ancient technical analysis technique.
  9. Financial Solutions For Young Women

    Break through the stereotypes and find out how to manage your life to meet your needs.
  10. Calculating The Means

    Learn more about the different ways you can calculate your portfolio's average return.
comments powered by Disqus
Marketplace
Hot Definitions
  1. Fool In The Shower

    The notion that changes or policies designed to alter the course of the economy should be done slowly, rather than all at once.
  2. Pattern Day Trader

    An SEC designation for traders who trade the same security four or more times per day (buys and sells) over a five-day period, and for whom same-day trades make up at least 6% of their activity for that period.
  3. Cost-Push Inflation

    A phenomenon in which the general price levels rise (inflation) due to increases in the cost of wages and raw materials.
  4. Happiness Economics

    The formal academic study of the relationship between individual satisfaction and economic issues, such as employment and wealth.
  5. Affluenza

    A social condition arising from the desire to be more wealthy, successful or to "keep up with the Joneses." Affluenza is symptomatic of a culture that holds up financial success as one of the highest achievements.
  6. Icarus Factor

    The term Icarus factor describes a situation where managers or executives initiate an overly ambitious project which then fails. Fueled by excitement for the project, the executives are unable to reign in their misguided enthusiasm before it is too late to avoid the failure.
Trading Center