1.

Explain how simulation is related to probability and explain how simulation is

used in the real world. Provide a specific example from your own line of work, or a
line of work that you find particularly interesting.
2. Identify the parts or aspects of the probability theory that you have found to be
particularly challenging. Describe why you believe that such aspects of probability are
challenging, and provide remedies to simplify those aspects.

Random processes occur across many disciplines like biology, chemistry, computer science and even
finance. Therefore, there is much interest to study these processes and come up with mathematical
models that can simulate them. Through the years several mathematical models, known as stochastic
models, like the Bernoulli process or Marvov chains have been successfully used to such an end.
However, since no random processes can be predicted with 100% precision. Most stochastics models
rely heavily on probability theory as the mathematical framework in order to predict the most likely
outcome or to study the variability of these processes[ CITATION Kni11 \l 1033 ].

Stochastics models have been used to predict several events like the average movement of molecules
inside a gas, bacteria growth and the volatility of the stock market. They are especially used due to their
predictability capacity and their low cost. Experiments that would cost millions of dollars and would
have taken days to be completed can be simulated for a fraction of the time and cost. That said, there
are not without flaws. According to Friesen[ CITATION Fri16 \l 1033 ], relying too much on the results of
stochastic model can create a false sense of accuracy. It is important to remember that the
mathematical models are only an approximation of reality. One example I find particularly interesting is
the use of stochastic models to predict how molecules move and interact with each other. The capacity
of simulating such events has helped to the advancement of quantum chemistry and thermodynamics.

One particular area that I find particularly challenging is the study of joint events, the dependency of
both events occurring makes the calculations of probability much longer and complex. Especially when
the events do not behave according to a known probability distribution. The assumption of mutually
exclusive is usually a significant one that greatly lowers the complexity of the study of probability.

Friesen, J. (2016, January). The ups and Down of stochastic modelling. Retrieved from Benefits Canada:
https://www.benefitscanada.com/uncategorized/the-ups-and-downs-of-stochastic-modelling-
75708

Knill, O. (2011). Probability and Stochastic Processes with Applications. India: Overseas Press.