Probability

Probability quantifies uncertainty by assigning numerical values to the likelihood of events. This topic covers basic probability rules, conditional probability, Bayes' theorem, counting techniques (combinations and permutations), common probability distributions, and expected value calculations.

Probability is essential in insurance for risk assessment, in medicine for evaluating diagnostic tests, in finance for pricing options, and in artificial intelligence for building predictive models.

Practice Tips

• 1Draw a tree diagram or Venn diagram for conditional probability problems to visualize the sample space and avoid mixing up P(A|B) with P(B|A).
• 2For counting problems, decide whether order matters (permutation) and whether repetition is allowed before choosing a formula.
• 3When computing expected value, list all outcomes with their probabilities and sum the products; verify that probabilities add up to one as a sanity check.