# Binomial Distribution

*Math & Statistics — Finicade finance glossary*

The binomial distribution gives the probability of a number of successes in a fixed count of independent yes/no trials with constant probability. It's the mathematics behind the binomial option pricing tree, default counts in a loan book, and the chi-square backtest of VaR exceedances. As the number of trials grows it converges to the normal distribution, which is the central limit theorem's most visible case.

**Formula:** `Mean = n × p, Variance = n × p × (1 − p)`

**Also known as:** binomial, Bernoulli trials

**Related terms:** [Probability Distribution](https://finicade.com/glossary/probability-distribution), [Binomial Tree](https://finicade.com/glossary/binomial-tree), [Normal Distribution](https://finicade.com/glossary/normal-distribution), [Expected Value](https://finicade.com/glossary/expected-value), [Probability](https://finicade.com/glossary/probability)

**Taught in:** Hull Street — The Options Desk Exam

Source: https://finicade.com/glossary/binomial-distribution