Appendix I: Introduction to Probability and Statistics

As Heraclitus said, “No man ever steps in the same river twice”; the world surrounding us is fast moving and full of randomness. Either the world is created that way, such that everything is random, or our understanding or knowledge is not sufficient to understand the laws behind the randomness. Regardless of this, we have to deal with the randomness and uncertainty that is represented in the random data we observe. The only tools we humans possess to deal with randomness are probability and statistics. Probability is a branch of theoretical mathematics to study the likeliness that a certain event will occur; statistics, on the other hand, is a branch of applied mathematics that measures ...

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