The Ins and Outs of Histograms
In this issue, we will tackle the probability distribution inference for a random variable.
No matter how good a stochastic model you have, you will always end up with an error term (aka shock or innovation) and the uncertainty (e.g. risk, forecast error) of the model is solely determined by this random variable. Second, uncertainty is commonly expressed as a probability distribution, so there is no escape!
June 7, 2012
