Page 68 - FINAL CFA SLIDES DECEMBER 2018 DAY 3
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Session Unit 3:
10. Common Probability Distributions
LOS 10.c: Interpret a Cumulative Distribution Function.
LOS 10.d: Calculate and interpret probabilities for a random variable, given its CDF.
Back to example on page 215
2 properties of a probability function: 0 ≤ p(x) ≤ 1; and ∑p(x) = 1,
F(3) = 0.6 = 0.1 + 0.2 + 0.3 = cumulative probability that outcomes 1, 2, or 3 occur.
F(4) = 1 = 0.1 + 0.2 + 0.3 + 0.4. = cumulative probability that one of the possible outcomes occurs.
