Red Words are anachronistic terms from Steam Era statistics that are likely to provoke Post-Traumatic Statistics Disorder, or PTSD. Avoid them and use Green Words instead when possible.

Red Word
Definition
Closest Green Word Equivalent (If Any)
AUTO-CORRELATION A Steam Era measure of the degree to which earlier data in a series are related to later data in the same series. Interrelationship of data through time
BAYESIAN ANALYSIS Addresses (among other things) the problem of false positives in testing for diseases or identifying terrorists. See Chapter 36 of Flaw of Averages. The approach is based on the chances of hitting a bullís-eye given that you have hit a target, as shown in Figure 36.1. No green word
CALCULUS A branch of mathematics that describes continuous changes. It was vital in the precomputer era in physics, engineering, statistics, and many other areas of mathematics. It is still conceptually useful in some applications. No green word
CENTRAL LIMIT THEOREM The reason the shape of a combination of uncertain numbers goes up in the middle. Diversification
CONCAVE FUNCTION A line graph in which the slope is continually decreasing. Downward curving
CONVEX FUNCTION A line graph in which the slope is continually increasing. Upward curving
CORRELATE The act of performing a correlation. Investigating an interrelationship.
CORRELATION A Steam Era measure of the degree to which points in a scatter plot lie along a straight line. Ranges from Ė1 (if the line is negatively sloped) to +1 (if the line is positively sloped). Interrelationship
COVARIANCE Another Steam Era calculation on which the correlation is based. Interrelationship
CUBIC EQUATION An equation involving x3. Harder to solve than a quadratic equation, which only involves x2. No green word
CUMULATIVE DISTRIBUTION A curve, which shows the outcome of an uncertain number, x on the horizontal axis and the chance that the number is less than or equal to x on the y axis. No green word
DISTRIBUTION The name of the shape of an uncertain number. Note, this is the only formerly Red Word I believe we must adopt to cure the Flaw of Averages. Distribution
EXPONENTIATING Raising a particular number to a power. No green word
F INVERSE The inverse function (swapping x and y axes) of a Cumulative Distribution curve. Used in the F Inverse Method to generate random draws from the distribution described by F. No green word
F-TEST A type of method for testing whether something happened by chance. No green word
FUNCTION A set of calculations into which numbers are input and from which numbers are output. Spreadsheet model
FUNCTION OF RANDOM VARIABLES A set of calculations into which uncertain numbers are input and from which uncertain numbers are output. Spreadsheet model with uncertain Inputs
FUNDAMENTAL IDENTITY OF SLURP ALGEBRA Describes why simulation models may be consolidated, if based on scenario libraries. No green word
GROUP A set of mathematical objects and a set of actions, which when performed on the objects return them to the same set. Example 1: the set of numbers and the operations of arithmetic, which when applied to numbers return another number. Example 2: A set of SIPs  belonging to a SLURP, and the operations of arithmetic, which when applied to the SIPs, return another SIP which belongs to the same SLURP. No green word
HYPOTHESIS TESTING Determining the probability that some event simply happened by chance. Did it happen by chance?
INTERPOLATION Given two entries in a table, a mathematical technique to estimate an intermediate value. Estimating intermediate values.
JENSEN'S INEQUALITY The reason that average inputs donít result in average outputs in many spreadsheet models. The Flaw of Averages (Strong Form)
LINEAR FUNCTION A line graph in which the slope is constant. Straight-line relationship
LINEAR PROGRAMMING A powerful mathematical technique to optimize resources, if you can figure out how to formulate your problem using straight-line relationships. Available in the spreadsheet environment since the mid-1980s. Optimization
MARKOV CHAIN A type of mathematical model that describes how the proportions of various segments of a population evolve over time. No green word
MEASURE THEORY The mathematical theory of measurement. A generalization of weighing things with scales and measuring with rulers. An important example is the measurement of the probabilities of events. Using scales and rulers on more abstract concepts than weights and lengths.
NEWTON-RAPHSON METHOD A mathematical technique to find where a curve hits the horizontal axis. No green word
NONLINEAR PROGRAMMING Like linear programming, but without the restriction of linear relationships. Available in the spreadsheet environment since the early 1990s. Optimization
NORMAL In statistics, having a normal distribution. Bell-shaped
NORMAL DISTRIBUTION The distribution that results when a sufficiently large number of identical independent uncertain numbers are added or averaged. Bell-shaped distribution
NULL HYPOTHESIS The assumption that something happened by chance. Devil's advocate's position
OPTIMIZATION Any mathematical technique to maximize or minimize an objective. Maximize or minimize
OPTIMIZATION Any mathematical technique to maximize or minimize an objective. Maximize or minimize
P VALUE The probability that something happened by chance. Likelihood of chance occurrence
RANDOM VARIABLE A mathematical construct used in the theory of probability. Uncertain number
REGRESSION Fitting a line to data points so as to minimize the errors. Straight line fit through a scatter plot
SCENARIO OPTIMIZATION A form of optimization that takes into account hundreds or thousands of possible future scenarios. No green word
SEQUENTIAL ANALYSIS A form of analysis that is halted when the value of the information that could be gained is less than the cost of continuing. No green word
SIGMA A Steam Era measure of the degree of uncertainty of an uncertain number. Degree of uncertainty
SIMPSON'S RULE Any mathematical technique to measure the area under a curve. No green word
SIX SIGMA A set of quality management methods for improving the consistency of products and services. Quality control
STANDARD DEVIATION Sigma Degree of uncertainty
STATISTICAL DEPENDENCE The degree to which the change in one variable is statistically likely to imply a change in another variable. Interrelationship
STOCHASTIC Pertaining to uncertainty. Uncertain
TAKING THE DERIVATIVE In calculus, finding the slope of a curve. Finding rate of change
TAYLOR SERIES A method for approximating a function with a polynomial. No green word
THEORY OF RATIONAL EXPECTATION A theory of behavior that assumes that people are able to calculate optimal strategies in the face of uncertainty (which they clearly canít always do) and then act on them. Acting in oneís best self-interest, if it can be determined
T-TEST A type of method for testing whether something happened by chance. No green word
U (0, 1) RANDOM VARIABLE The definition of the uncertain number that comes from an idealized spinner as described in Ch. 8. The outcome of a spinner that runs from 0 to 1
U ((0, 1) xCOS (NORMAL (0, 1)) A ridiculous calculation I invented to see how it would be interpreted by Tom Keelin's Metalog distribtution. No green word
UTILITY THEORY The economic theory addressing risk attitude. Risk attitude
VARIANCE A Steam Era calculation on which the standard deviation is based. Degree of uncertainty