Compound Poisson Distribution

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Definition: Compound Poisson Distribution

Poisson distribution is used for probability of discrete series but Compound Poisson distribution is used for both discrete as well as continuous. It is the probability distribution of random variables which follow Poisson distribution.

If a1, a2, a3 etc., are identically distributed random variables and N ~ Poisson,

Then Y|N = Ʃ(n=1,N) Xn

 

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