A distribution like no other
Standard probability distributions can sometimes be far removed from what is observed. When extreme cases occur too often, the Cauchy distribution comes into its own.

Standard probability distributions can sometimes be far removed from what is observed. When extreme cases occur too often, the Cauchy distribution comes into its own.

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Gaussian curves are unsuitable for modelling risky financial assets such as stocks. To overcome this problem, Benoît Mandelbrot introduced the concept of a multifractal measure and generalized Brownian motion.

Repeating a random experiment with two possible outcomes a large number of times leads to probabilities that are difficult to predict directly, let alone calculate explicitly. Yet the de Moivre–Laplace theorem provides an excellent approximation.

Repeating a random experiment with two possible outcomes a large number of times leads to probabilities that are difficult to predict directly, let alone calculate explicitly. Yet the de Moivre–Laplace theorem provides an excellent approximation.
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