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T Distribution

What is 'T Distribution'

A type of probability distribution that is theoretical and resembles a normal distribution. A T distribution differs from the normal distribution by its degrees of freedom. The higher the degrees of freedom, the closer that distribution will resemble a standard normal distribution with a mean of 0, and a standard deviation of 1.

The T distribution is also known as the "Student's T Distribution".

Explaining 'T Distribution'

The use of a T distribution is precluded by the standard deviation of the population parameter being unknown and allows the analyst to approximate probabilities, based on the mean of the sample, the population, the standard deviation of the sample and the sample's degrees of freedom. As the sample's degrees of freedom approaches 50, the T distribution will virtually be identical to the normal distribution.


Further Reading


The distribution of stock returns: international evidence
www.tandfonline.com [PDF]
The aim of this monograph is quite modest: It attempts to be a systematic exposition of all that appeared in the literature and was known to us by the end of the 20th century about the Laplace distribution and its numerous generalizations and extensions. We have tried to …

Spurious regressions in financial economics?Spurious regressions in financial economics?
onlinelibrary.wiley.com [PDF]
The aim of this monograph is quite modest: It attempts to be a systematic exposition of all that appeared in the literature and was known to us by the end of the 20th century about the Laplace distribution and its numerous generalizations and extensions. We have tried to …

Scaling of the distribution of fluctuations of financial market indicesScaling of the distribution of fluctuations of financial market indices
journals.aps.org [PDF]
The aim of this monograph is quite modest: It attempts to be a systematic exposition of all that appeared in the literature and was known to us by the end of the 20th century about the Laplace distribution and its numerous generalizations and extensions. We have tried to …

An empirical comparison of published replication research in accounting, economics, finance, management, and marketingAn empirical comparison of published replication research in accounting, economics, finance, management, and marketing
www.sciencedirect.com [PDF]
The aim of this monograph is quite modest: It attempts to be a systematic exposition of all that appeared in the literature and was known to us by the end of the 20th century about the Laplace distribution and its numerous generalizations and extensions. We have tried to …

The econometrics of financial marketsThe econometrics of financial markets
www.sciencedirect.com [PDF]
The aim of this monograph is quite modest: It attempts to be a systematic exposition of all that appeared in the literature and was known to us by the end of the 20th century about the Laplace distribution and its numerous generalizations and extensions. We have tried to …

Power laws in economics and finance: some ideas from physicsPower laws in economics and finance: some ideas from physics
www.tandfonline.com [PDF]
The aim of this monograph is quite modest: It attempts to be a systematic exposition of all that appeared in the literature and was known to us by the end of the 20th century about the Laplace distribution and its numerous generalizations and extensions. We have tried to …

Estimating stock market volatility using asymmetric GARCH modelsEstimating stock market volatility using asymmetric GARCH models
www.tandfonline.com [PDF]
The aim of this monograph is quite modest: It attempts to be a systematic exposition of all that appeared in the literature and was known to us by the end of the 20th century about the Laplace distribution and its numerous generalizations and extensions. We have tried to …



Q&A About T Distribution


What are degrees of freedom?

Degrees of freedom are used to determine how closely the data will resemble a standard normal distribution.

What is a T distribution?

A T distribution is a theoretical probability distribution that resembles a normal distribution.

How does the T Distribution differ from the normal distribution?

The T Distribution differs from the normal because of its degrees of freedom.

How do you use the T Distribution?

You can use it to approximate probabilities based on mean, population, sample's standard deviation and sample's degrees of freedom.