Building Probability Models in Excel Part 4: Discrete Random Variables

Posted on
6,486 Points
Last Modified:
Experience Level: Beginner
The viewer will learn how to use the =DISCRINV command to create a discrete random variable, use this command to model a set of probabilities and outcomes in a Monte Carlo simulation, and learn how to find the standard deviation of a set of probabilities and outcomes with the =STDEVPR command.

Video Steps

1. Discrete Random Variables: Type in the set of outcomes and corresponding probabilities in cells A2:B6

2. Enter =SUM(B2:B6) into cell B7

3. Enter =DISCRINV(RAND(),A2:A6,B2:B6) into cell B9 and label “Profit”

4. Enter =B9 into cell B14

5. Select cells A14:B213

6. Click Tools > SimTools > Simulation Table

7. Enter =AVERAGE(B14:B213) into cell B11 and label “Mean”

8. Enter =STDEV(B14:B213) into cell B12 and label “StDev”

9. Enter =STDEVPR(A2:A6,B2:B6) into cell C12

Author:Toby Reaper

Featured Post

Get expert help—faster!

Need expert help—fast? Use the Help Bell for personalized assistance getting answers to your important questions.

Join & Write a Comment

Get to Know about Lotus Notes email migration to Office 365 in detail. Explore the article for better Lotus Notes to Office 365 migration techniques to transfer all data items to the O365 domain.
This article covers the things you should know about Email backup in Office 365. Backing up emails is the most crucial part that generally neglected by users.

Keep in touch with Experts Exchange

Tech news and trends delivered to your inbox every month