Financial Derivatives/Notions of Probability Theory

Notions of Probability TheoryEdit

Here we introduce the notions of probability theory essential for the understanding of the book. The interested reader is referred to more thorough accounts of probability theory.

Useful distributionsEdit

Discrete distributionsEdit

For a thourough list of discrete distributions and their properties the interested reader is referred to Wikipedia on discrete distributions.

Binomial DistributionEdit

The binomial distribution of parameters   and  

 

Poisson distributionEdit

The poisson distribution with parameter  , the intensity

 

Continuous distributionsEdit