This book covers the basic probability of distributions with an emphasis on
applications from the areas of investments, insurance and engineering. It
grew out of curriculum development work that the author initiated during the
1990s while at the University of Michigan and is based on the author's
experience over many years teaching probability, insurance and mathematical
finance to undergraduate and graduate students in mathematics, statistics,
actuarial science, financial economics, engineering and business, many of
whom were preparing for professional examinations.
The author's goal was to write a textbook that would be suitable for both
traditional and reform style courses in probability, as a self-study guide for
students preparing for professional examinations in actuarial science or
finance, and as a reference for industry practitioners and researchers.
Since its initial publication, this book has been used around the world for
classroom teaching, self-study and reference, and for several years has been a
textbook on the syllabus of examinations for the Casualty Actuarial Society
and the Society of Actuaries.
Features of This Book
In addition to covering the standard topics and distributions in probability,
this book has a number of features that distinguish it from other probability
• Key concepts are introduced through detailed motivating examples.
• Random variables and probability distributions are introduced early
in the text.
• There are separate sections on topics such as mixtures and
compound distributions, geometric means, distributions of
transformations and the Pareto, beta and Weibull distributions,