How would you go about explaining i.i.d to non techncial people?
migrated from quant.stackexchange.com Oct 21 '11 at 18:42
It means "Independent and identically distributed".
A good example is a succession of throws of a fair coin: The coin has no memory, so all the trows are "independent".
And every throw is 50:50 (heads:tails), so the coin is and stays fair - the distribution from which every throw is drawn, so to speak, is and stays the same: "identically distributed".