Risk Management, 5th Edition

Appendix C: Basic Probability Concepts

This appendix serves as a very basic introduction to probability and statistical concepts that may be useful for risk analysis. It is by no means all-inclusive but rather may be thought of as a primer. The appendix contains three sections. The first section is an introduction to probability, centering on definitions and simple examples. The second section provides a summary of descriptive statistics, including a look at statistical confidence and confidence intervals, and explains probability density functions (PDFs) and cumulative density functions (CDFs) defining distributions that are relevant to risk analysis, such as the normal, uniform, and triangular. The third section discusses statistical independence, ...