# Basic Concepts in Probability (Spanish Version)

28 Pages Posted: 23 Feb 2006

See all articles by Ignacio Velez-Pareja

## Ignacio Velez-Pareja

Grupo Consultor CAV Capital Advisory & Valuation

Date Written: October 2002

### Abstract

This is a course material for an introductory course in Probability and Statistics for Engineering and Management. It is part of some course notes for my courses in Spanish on that subject. The draft of the book is Apuntes de Probabilidad y Estadística para Ingeniería y Administración (Notes for Probability and Statistic for Engineering and Management) and this part is Conceptos básicos de probabilidad (Basic Concepts in Probability). When we make decisions and we are confronted with future and known events the only reason a decision maker makes a mistake is when she has made mistake in her analysis. This is known as decision making under certainty. Unfortunately this is not the most common situation.

Reality is unpredictable and we make decisions under risk and uncertainty and the decision maker has to assume risks. For these typical and common situations we need to study the probability associated to each event and we need to know how to measure and apply it in the decision process.

In this chapter we study the basic concepts of events and probability, including the idea of inductive and deductive processes. We study the notion of statistical independence and Bayes' Theorem. All these methods are studied using intensively the spreadsheet.

Keywords: Probability ruels, induction, deduction, random variable, independence

JEL Classification: C11

Suggested Citation

Velez-Pareja, Ignacio, Basic Concepts in Probability (Spanish Version) (October 2002). Available at SSRN: https://ssrn.com/abstract=885743 or http://dx.doi.org/10.2139/ssrn.885743

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