Business and Personal Finance Dictionary
# A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
- CONFIDENCE INTERVAL
The degree of certainty that an event will fall outside of boundaries on a distribution. For a normal distribution, boundaries set at two standard deviations from the mean create approximately 95 percent confidence intervals. In other words, only 5 percent of the events will be smaller or larger than the boundary amounts. Often applied to VaR measures of risk.Back