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Statistical Foundations of Quantitative Risk and Cost Analysis

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Learning Objectives

By the end of this chapter, you will be able to:

•  Define the Law of Large Numbers and the concepts of statistics and probability that derive from it.

•  Explain the difference between probability and odds, and understand the roles each plays in risk decision-making.

•  Apply basic rules of probability, including joint probability and union.

•  Prepare a distribution of outcomes and recognize types of normal distributions (wide, narrow) and when a distribution is not normal.

•  Define the three measures of central tendency (mean, median, and mode) and ...

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