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Now that we've calculated and visualized returns, it's time to understand the statistical properties that describe them. Financial returns follow a probability distribution, which describes the likelihood of different return outcomes. The most common way to model financial returns is with a normal distribution, which is a basic, bell-shaped curve. But sometimes, this curve doesn't fit all the data we see, especially when returns are not evenly spread out. In those cases, we might use other types like the Student's t-distribution or the lognormal distribution.
