What is a 'Probability Distribution'
A probability distribution is a statistical function that describes all the possible values and likelihoods that a random variable can take within a given range. This range will be between the minimum and maximum statistically possible values, but where the possible value is likely to be plotted on the probability distribution depends on a number of factors, including the distributions mean, standard deviation, skewness and kurtosis.
BREAKING DOWN 'Probability Distribution'
Academics and fund managers alike may determine a particular stock's probability distribution to determine the possible returns that the stock may yield in the future. The stock's history of returns, which can be measured on any time interval, will likely be comprised of only a fraction of the stock's returns, which will subject the analysis to sampling error. By increasing the sample size, this error can be dramatically reduced.
There are many different classifications of probability distributions, including the chi square, and normal and binomial distributions.

Normal Distribution
A probability distribution that plots all of its values in a ... 
Mesokurtic
A term used in a statistical context where the kurtosis of a ... 
Standard Error
The standard deviation of the sampling distribution of a statistic. ... 
Bell Curve
The most common type of distribution for a variable. The term ... 
Platykurtosis
A statistical measure that indicates the level of peakedness ... 
LogNormal Distribution
A statistical distribution of random variables which have a normally ...

Term
What a Normal Distribution Means
Normal distribution describes a symmetrical data distribution, where most of the results lie near the mean. 
Forex Education
Trading With Gaussian Models Of Statistics
The entire study of statistics originated from Gauss and allowed us to understand markets, prices and probabilities, among other applications. 
Investing Basics
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. 
Fundamental Analysis
Quantitative Analysis Of Hedge Funds
Hedge fund analysis requires more than just the metrics used to analyze mutual funds. 
Economics
Understanding Statistics
Statistics provide the means to analyze data and then summarize it into a numerical form. 
Markets
The Uses And Limits Of Volatility
Check out how the assumptions of theoretical risk models compare to actual market performance. 
Fundamental Analysis
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. 
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. 
Investing
What is Descriptive Statistics?
Descriptive statistics is the term applied to meaningful data analysis. 
Options & Futures
Multivariate Models: The Monte Carlo Analysis
This decisionmaking tool integrates the idea that every decision has an impact on overall risk.

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