Stochastic Processes

If one follows the usual definition of a process as a chain of events and events being changes of the state of some entity, one can distinguish between processes whose events are deterministic changes of the state of an entity and those in which the state of an entity changes with a certain probability. These latter processes are called stochastic processes. Another distinction that can be made is between continuous and discrete processes: In continuous processes, the state of an entity changes smoothly; in discrete processes, it changes only at certain points of time, either equidistant or not. Moreover, the states that an entity can acquire can be continuous or discrete. Whether processes in the real world are deterministic or stochastic, continuous or discrete is ...

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