Page 77 - FINAL CFA SLIDES DECEMBER 2018 DAY 3
P. 77
Session Unit 3:
10. Common Probability Distributions
LOS 10.h: Define the continuous uniform distribution and calculate and interpret probabilities, given a continuous
uniform distribution, p.222
Recall for a continuous uniform distribution, if a < x < b, P(X = x) = 0. Formally stated
• For all a ≤ x1 < x2 ≤ b (i.e., for all x1 and x2 between the boundaries a and b).
• P(X < a or X > b) = 0 (i.e., the probability of X outside the boundaries is zero).
• P(x1 ≤ X ≤ x2) = (x2 – x1)/(b – a). This is probability of outcomes between x1 and x2.
For a continuous uniform distribution, the p of outcomes in a range that is ½ of the whole
range is 50% and in ¼ of the of the whole possible range is 25%.
Example: Continuous uniform distribution: X is uniformly distributed between 2 and 12.
Calculate the probability that X will be between 4 and 8.
