Binomial Probability Distribution: Understanding the Basics | CFA Level 1 Exam Prep

Binomial Probability Distribution

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In a binomial probability distribution,

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A binomial distribution with "N trials" arises when the same experiment is repeated N times. Each of the trails is known as a "Bernoulli" trial. It is the Bernoulli trial which can only take two distinct values, "success" and "failure." Each outcome of a binomial distribution with N trials is the string of N values generated by the individual Bernoulli trials. Clearly, the binomial distribution with N trials can take 2^N values, even though each individual trial can have only two outcomes. It is important that you understand the difference between the binomial distribution and the underlying Bernoulli trials themselves.