Random variable

Updated: Aug 20, 2021

A function that maps the outcomes of a random experiment onto the real numbers. For example, one can define a random variable X as taking value 0 when a tossed coin shows ‘heads’ and value 1 when the coin shows ‘tails’. A random variable is characterized by a probability distribution, i.e. the set of all possible values that it can assume and the corresponding probabilities. A random variable is continuous, or has a continuous distribution, if it can take any values from an interval, bounded or unbounded; and it is discrete, or has a discrete distribution, if it can only take a countable, finite or infinite number of values.

Reference: Oxford Press Dictonary of Economics, 5th edt.

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James Knight
Editor of Education
James is the Editor of Education for Invezz, where he covers topics from across the financial world, from the stock market, to cryptocurrency, to macroeconomic markets.... read more.