Random variable

Outcome

mutually exclusive

PM "given"
Basic concepts exhaustive
Event
(biến cố)
dependent vs independent events independent event formula
Expected value
Probability
Random variable
Variance and standard deviation
probability of any event is between 0 and 1

sum of the probabilities of any set of

Probability tree
Characteristics mutually exclusive and exhaustive events = 1

Expected return Subjective probability (personal judgement)

Types of probability Empirical probability (historical data)

Basic features of probability
Objective probability
range from negative infinity to positive infinity Characteristics
Priori probability (logical analysis)
Covariance of portfolio return

Formula
using probability function
Odds for of a to b 1:9
Odds for vs Odds against
Odds against of a to b
9:1
Correlation Portfolio returns Application of probability
R3: Probability concepts Unconditional probability P(B) – also known as marginal probability of B
rules

P(A│B) – Probability of an event A given event B

Conditional probability
Formula
P(AB) = P(A|B) * P(B)
Conditional, unconditional
Variance probability and total
probability rule

Addition rule

A
Bayes' formula

Probability rule
Multiplication rule A|B1 A|B2

Factorial
(giai thừa)

2 scenarios
Order matters? Labeling problems
(1), (4) (multinomial formula)
(hoán vị lặp)
Accounting principle

Total probability rule

Combination
Order not matters?
(2),(3) (binomial formula)
(tổ hợp)
n scenarios

Permutation
(chỉnh hợp)