DEFINITION of 'Random Variable'
A variable whose value is unknown or a function that assigns values to each of an experiment's outcomes. Random variables are often designated by letters and can be classified as discrete, which are variables that have specific values, or continuous, which are variables that can have any values within a continuous range.
INVESTOPEDIA EXPLAINS 'Random Variable'
Consider an experiment where a coin is tossed three times. If X represents the number of times that the coin comes up heads, then X is a discrete random variable that can only have the values 0,1,2,3 (from no heads in three successive coin tosses, to all heads). No other value is possible for X.
An example of a continuous random variable would be an experiment that involves measuring the amount of rainfall in a city over a year, or the average height of a random group of 25 people.

Discrete Distribution
The statistical or probabilistic properties of observable (either ... 
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A statistical method wherein the data is not required to fit ... 
Normal Distribution
A probability distribution that plots all of its values in a ... 
Probability Distribution
A statistical function that describes all the possible values ... 
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A financial solvency ratio that compares a financial institutionâ€™s ...

What is the difference between a simple random sample and a stratified random sample?
Simple random samples and stratified random samples differ in how the sample is drawn from the overall population of data. ... Read Full Answer >> 
What are the advantages and disadvantages of using systematic sampling?
As a statistical sampling method, systematic sampling is simpler and more straightforward than random sampling. It can also ... Read Full Answer >> 
What is the difference between the standard error of means and standard deviation?
The standard deviation, or SD, measures the amount of variability or dispersion for a subject set of data from the mean, ... Read Full Answer >> 
What is the theory of asymmetric information in economics?
The theory of asymmetric information was developed in the 1970s and 1980s as a plausible explanation for common phenomena ... Read Full Answer >> 
How does market risk differ from specific risk?
Market risk and specific risk are two different forms of risk that affect assets. All investment assets can be separated ... Read Full Answer >> 
How is perpetuity used in the Dividend Discount Model?
The basic dividend discount model (DDM) creates an estimate of the constant growth rate, in perpetuity, expected for dividends ... Read Full Answer >>

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