Understanding the Basics
Probability theory is a branch of mathematics concerned with analyzing random phenomena. The central objects of probability theory are random variables, stochastic processes, and events: mathematical abstractions of non-deterministic phenomena or measured quantities that may either be single occurrences or evolve over time in a randomized way.
Key Concepts
- Random Variables
- Probability Distributions
- Expected Value
- Variance
Tools and Applications
Probability theory is crucial in fields such as finance, science, and engineering due to its ability to provide a framework for modeling uncertainty. Common tools include probability density functions and cumulative distribution functions.