Fundamentals of Probability (FRM Part 1 2023 – Book 2 – Chapter 1)

*AnalystPrep is a GARP-Approved Exam Preparation Provider for FRM Exams*

After completing this reading, you should be able to:
- Describe an event and an event space.
- Describe independent events and mutually exclusive events.
- Explain the difference between independent events and conditionally independent events.
- Calculate the probability of an event for a discrete probability function.
- Define and calculate a conditional probability.
- Distinguish between conditional and unconditional probabilities.
- Explain and apply Bayes’ rule.

0:00 Introduction
0:12 Learning Objectives
1:30 Mutually Exclusive Events
3:32 Independent Events
5:40 Conditional Probabilities
9:34 Summary
9:47 A Description of Bayes' Theorem
14:09 Bayes' Theorem - The Simple Case
18:45 Bayes' Theorem - The General Case
19:05 Prior vs. Posterior
20:54 Applying Bayes' Theorem

[sams]

Thanks for these great videos - I have been staring at 16:51 Bayes' Theorem - The Simple Case and was hoping someone could clarify something. Should it be written that 'rainy days are cloudy 60% of the time' rather than '60% of cloudy days will end up being rainy days'? Surely if we have the information that '60% of cloudy days will end up being rainy days', then the answer to the question: 'what is the probability that it will rain during your round of golf (given that it is a cloudy morning)' is 60%. Thanks!

[amankrishna]

Professor James's explanations are really engaging, with the right amount of fun elements sprinkled on top to make them interesting. Will think of getting AP materials for Part - II now .

[naufalazami]

What difference between the lecture video in this utube channel compare to if i purchase course in analystprep website?

[monikatewari]

Hi I have a question- How will we find out the approximate probability that the new manager will outperform the market next year using the Bayesian approach.

[abhishekagrawal]

Hi can you pls also explain the derivation of Probability formula

[souravyadav]

@ 9:00 the questions answer should have been P(A andB)/P(B)= 0.2/0.5= 40%

0.5 because the bond was owned by both investors who had just bond and both stocks and bonds thus 0.2 + 0.3

Correct me if I am wrong!

[KingKing-rgtv]

the slide are very poor quality we can read nothing.