14 Questions
What is the Gaussian distribution characterized by?
A bell-shaped curve, symmetrical around its mean, and characterized by its mean and standard deviation
What does the Central Limit Theorem state?
The sum of a large number of independent and identically distributed random variables will tend to be normally distributed
Why is the Gaussian distribution important?
It describes the distribution of many naturally occurring phenomena
What phenomena can be described by a Gaussian distribution?
The distribution of heights or IQ scores of people
What does the graphical depiction of the Central Limit Theorem show?
How a huge number of data points cluster together
What is the main implication of an asset deviating from the mean price in a normal distribution?
It is more likely to be under or overvalued
Why do most traders limit their transactions to shorter intervals of time when modeling price movements as a normal distribution?
Shorter intervals offer clearer buying and selling signals
What is the kurtosis of price distributions with fat tails?
Bigger than 3
Why may past performance of an asset not reliably foretell future results, even if it has followed a normal distribution over a lengthy period of time?
Future price movements are uncertain and influenced by various factors
What do traders look at to suggest potential trades when modeling price movements as a normal distribution?
Standard deviations
What are prediction errors in machine learning usually known as?
Bias and Variance
What is the main aim of ML/data science analysts in relation to prediction errors?
To reduce the errors for more accurate results
What concept describes the trade-off between bias and variance in machine learning?
Bias-Variance trade-off
What is the term for the situation where a machine learning model is not complex enough to capture the underlying patterns in the data?
Underfitting
Test your knowledge on the fundamentals of the Gaussian distribution, a widely used continuous probability distribution in statistical modeling. Explore its symmetrical bell-shaped curve, mean, standard deviation, and its application in real-world scenarios.
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