The term "stochastic" refers to processes that involve randomness or uncertainty. In a stochastic system, outcomes are not predetermined and can vary each time an event occurs. This concept is commonly used in fields like finance, statistics, and science to model complex phenomena where exact predictions are impossible. For example, in finance, stock prices can be considered stochastic because they fluctuate due to various unpredictable factors such as market trends and investor behavior. Similarly, in weather forecasting, the likelihood of rain can be described using stochastic models that account for the inherent unpredictability of atmospheric conditions.