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Intuitive Explanation of Expected Value

Posted on November 24, 2018 Written by The Cthaeh 14 Comments

A pile of poker chips and a few dice

Expected value is another central concept in probability theory. It is a measure of the “long-term average” of a random variable (random process). I know this doesn’t sound too clear, but in this post I’m going to explain exactly what it means.

There are many areas in which expected value is applied and it’s difficult to give a comprehensive list. It is used in a variety of calculations by natural scientists, data scientists, statisticians, investors, economists, financial institutions, and professional gamblers, to name just a few.

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Filed Under: Probability Theory Tagged With: Coin flip, Expected value, Law of large numbers, Mean

The Mean, the Mode, And the Median

Posted on October 1, 2018 Written by The Cthaeh 2 Comments

Mean, median, and mode of a distribution shown on a Spaghetti Western background

The concepts of mean, median, and mode are fundamental to statistics, probability theory, and anything related to data analysis as a whole. Being this important, they deserve their own introduction.

In statistics, these 3 concepts are examples of measures of central tendency. This is a fancy way of saying that they are single values that summarize collections of values.

Let’s unpack the last sentence. What exactly do I mean by ‘values’ and ‘collections of values’?

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Filed Under: Statistics Tagged With: Mean, Parameter estimation

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