Primer on Probability and Statistics

This chapter provides a brief overview of the concepts of probability. Probability theory is an integral part of risk assessment. Games of chance like craps and card games that have discrete probabilities associated with various outcomes are a good way of explaining probability. Real‐life events might have a discrete probability either associated with them or continuous. When probabilities are combined, the probabilities are multiplied together to determine the final probability for the combined events. The rules of Boolean algebra are used to combine probabilities. The two most commonly used Boolean algebra terms are the logical "AND" and "OR". Conditional probability is a probability whose sample space has been limited to only those outcomes that fulfill a certain condition. The probabilities of events fall within one of several probability distributions. Using the craps example and using a bar chart to display the distribution of events and their corresponding probabilities, the chapter presents a very discrete distribution.