Calculate Probabilities Using Addition and Multiplication Rules
The Addition Rule The Addition Rule of Probability is a rule for determining is used to find the probability that event A or event B happens. It’s associated with the use of the conjunction “or.” For example, We may want…
Calculate probabilities of mutually exclusive events
Mutually Exclusive Events \(A\) and \(B\) are mutually exclusive events if \(A\) and \(B\) cannot both occur at the same time. For example, when a coin is flipped, it cannot land on both the head and tail simultaneously. Therefore, we…
Define set functions, Venn diagrams, sample space, and events & define probability as a set function on a collection of events and state the basic axioms of probability.
What Is Probability? In mathematics, probability is the branch that deals with numerical descriptions of the likelihood that events will occur or that propositions are true. Probability is a number between 0 and 1, with 0 representing impossibility and 1…
What is ERM?
After completing this reading, you should be able to: Describe enterprise risk management (ERM) and compare and contrast differing definitions of ERM. Compare the benefits and costs of ERM and describe the motivations for a firm to adopt an ERM…
FRM Part I & II Curriculum
FRM Part I Foundations of Risk Management 1. The Building Blocks of Risk Management 2. How Do Firms Manage Financial Risk? 3. The Governance of Risk Management 4. Credit Risk Transfer Mechanisms 5. Modern Portfolio Theory (MPT) and the Capital Asset…
