1 Learning Objectives

Important concepts in probability theory including random variables and independence
How to perform a Monte Carlo simulation
The meaning of expected values and standard errors and how to compute them in R
The importance of the Central Limit Theorem

1.1 Course Overview

1.1.1 Section 1: Discrete Probability

You will learn about basic principles of probability related to categorical data using card games as examples.

1.1.2 Section 2: Continuous Probability

You will learn about basic principles of probability related to numeric and continuous data.

1.1.3 Section 3: Random Variables, Sampling Models, and The Central Limit Theorem

You will learn about random variables (numeric outcomes resulting from random processes), how to model data generation procedures as draws from an urn, and the Central Limit Theorem, which applies to large sample sizes.

1.1.4 Section 4: The Big Short

You will learn how interest rates are determined and how some bad assumptions led to the financial crisis of 2007-2008.