Compare And Contrast The Binomial Distribution And The Poisson Distribution

Compare and contrast the binomial distribution and the Poisson distribution. How are the similar and how do they differ?The binomial distribution and the Poisson distribution are similar because they are both discrete distributions. The second similarity is that both the binomial distribution and the Poisson distribution measure the number of occurrences. While the binomial distribution and Poisson distribution considers the likelihood of a pass or fail outcome in a survey or experiment with numerous repeated attempts the Binomial distribution counts the number of occurrences out of a fixed number (N) of possibilities and the Poisson distribution counts the number of occurrences in an interval given a certain rate of occurrence per interval CITATION Bla11 \l 7177 (Black, 2011). ReferenceBlack, K. (2011). Business statistics: for contemporary decision-making. John Wiley & Sons.Why is binomial distribution important?The Binomial distribution uses only two possible outcomes such as heads or tails, or true or false. It can therefore be used to predict outcomes where there are only two possibilities. In the financial system for example, the Binomial distribution can be used to determine the likely hood of defaulting by borrowers. This probability can be used in pricing insurance and deciding on