Situations or models containing a random element, hence unpredictable and without a stable pattern or order. All natural events are stochastic phenomenon. And businesses and open economies are stochastic systems because their internal environments are affected by random events in the external environment. Stochastic is often taken to be synonymous with probabilistic but, strictly speaking, stochastic conveys the idea of (actual or apparent) randomness whereas probabilistic is directly related to probabilities and is therefore only indirectly associated with randomness. Greek for, skillful in aiming or guessing. See also Markov process.
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