DEFINITION of 'T Distribution'
A type of probability distribution that is theoretical and resembles a normal distribution. A T distribution differs from the normal distribution by its degrees of freedom. The higher the degrees of freedom, the closer that distribution will resemble a standard normal distribution with a mean of 0, and a standard deviation of 1.
The T distribution is also known as the "Student's T Distribution".
INVESTOPEDIA EXPLAINS 'T Distribution'
The use of a T distribution is precluded by the standard deviation of the population parameter being unknown and allows the analyst to approximate probabilities, based on the mean of the sample, the population, the standard deviation of the sample and the sample's degrees of freedom. As the sample's degrees of freedom approaches 50, the T distribution will virtually be identical to the normal distribution.

Degrees Of Freedom
In statistics, the number of values in a study that are free ... 
Acceptance Sampling
A statistical measure used in quality control. A company cannot ... 
Nonparametric Statistics
A statistical method wherein the data is not required to fit ... 
Sampling Error
A statistical error to which an analyst exposes a model simply ... 
Normal Distribution
A probability distribution that plots all of its values in a ... 
NonSampling Error
A statistical error caused by human error to which a specific ...

Personal Finance
Does Your Investment Manager Measure Up?
These key stats will reveal whether your advisor is a league leader or a benchwarmer. 
Mutual Funds & ETFs
5 Ways To Measure Mutual Fund Risk
These statistical measurements highlight how to mitigate risk and increase rewards. 
Bonds & Fixed Income
Find The Highest Returns With The Sharpe Ratio
Learn how to follow the efficient frontier to increase your chances of successful investing. 
Fundamental Analysis
What are the most common issues with Serial Correlation in stocks?
Read about the concept of serial correlation in stock returns, and learn why market analysts are divided about the efficacy of trading based on stock patterns. 
Bonds & Fixed Income
How do I calculate yield to maturity of a zero coupon bond?
Find out how to calculate the yield to maturity for a zero coupon bond, and see why this calculation is more simple than a bond with a coupon. 
Trading Strategies
How far back in a stock's history should you go when gauging its volatility?
Discover why it can be difficult for investors to figure out how far back to go into a stock's history when gauging its volatility. 
Fundamental Analysis
What does the term 'invisible hand' refer to in the economy?
Discover and understand the concept of the "invisible hand" as explained by Adam Smith, considered the founder of modern economic theory. 
Fundamental Analysis
At what level is the current account deficit considered excessive, in terms of percent?
Take a deeper look at the variables that impact current account deficits, and learn why not all types of deficits have equal impacts on a nation's economy. 
Trading Strategies
What are common examples of Serial Correlation in finance?
Take a deeper look at serial correlation in finance, and find out why most attempts at discovering serial correlation among asset prices have failed. 
Fundamental Analysis
What is the difference between yield and rate of return?
Read about the differences between yield and rate of return. See why many novice investors often struggle more with the concept of yield.