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Banks develop statistical models to calculate their maximum loss over a given time period. This approach is known as the
Probability Distribution
A description of how the probabilities are distributed over the values of the random variable.
Sample Mean
The average calculated from a sample of data, representing the central point or typical value of the sample.
Population Mean
The average of all the values in a population, representing the central point of a data set.
Parameters
Quantitative characteristics that define or summarize features of a population in statistical analysis.
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