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Probabilistic Methods for Financial and Marketing Informatics by Xia Jiang, Richard E. Neapolitan

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Chapter 2

Probability and Statistics

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This chapter reviews the probability and statistics you need to read the remainder of this book. In Section 2.1 we present the basics of probability theory, while in Section 2.2 we review random variables. Section 2.3 briefly discusses the meaning of probability. In Section 2.4 we show how random variables are used in practice. Finally, Section 2.5 reviews concepts in statistics, such as expected value, variance, and covariance.

2.1 Probability Basics

After defining probability spaces, we discuss conditional probability, independence and conditional independence, and Bayes’ Theorem.

2.1.1 Probability ...

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