Customer Reviews

Probability: The Science of Uncertainty with Applications to Investments, Insurance, and Engineering

5 star:		(3)
4 star:		(3)
3 star:		(1)
2 star:		(0)
1 star:		(2)

 

 

This book is on the course of reading for the Society of Actuaries and Casualty Actuarial Society jointly sponsored Course 1/Exam 1. Although all the probability books listed on the course of reading are good, this text is probably the one to choose. The book seems to be designed with an actuarial student in mind, and an actuarial student would find it very useful for self study. A solution manual is also available.

The quality and level of the writing are excellent. It covers all the required probability topics, and emphasizes certain topics that are not usually emphasized in other texts. Some of these topics are conditional probability; distributional form of Law of Total Probability and Bayes Theorem; conditional expectation; limited moments; mixed probability distributions; survival distributions; hazard or mortality functions; special continuous distributions used in survival analysis (Weibull, Pareto, etc.); compound Poisson and other compound distributions. All but the last chapter on option pricing would be required reading for Exam 1, and the last chapter useful for Exam 2.

A very useful feature of this textbook is that in Chapters 5 (Special Discrete Distributions) and 6 (Special Continuous Distributions) the distribution theory is very clearly outlined. For example, relationship to other distributions, distribution of iid sums, limiting distributions, etc. are clearly stated and summarized. In addition to Exam 1, this text will also be valuable as a reference to study for Exam 4.

Students who would have difficulty with the level of this presentation will also have difficulty with SOA Exam 1.

I used this textbook as my main study material for the SOA/CAS P/1 exam. I found it to be well-written and understandable. I have some background in calculus and probability (long-forgotten college courses). I'm hanging on to it for future reference. It's actually possible to learn the material from the book all on your own. All in all, one of the better textbooks out there.

I used this book to study for SOA exam P and loved it! If you already have some background in statistics and probability, this is the book to go. It will fill in the blanks left by your average school textbook and give you the nesessary coverage of the exam material.

I appreciate that many people will be buying this because it has been endorsed by the Society of Actuaries. My review is for those who aren't being compelled to use the book in exam prep. I find "The Science of Uncertainty" to be the most consistently useful of the statistics texts in my office. The examples are clear, it has the right equations, and it's well organized.

Some people here are complaining of inaccuracies but they provide no examples and, frankly, I've never noticed a problem.

I like that authors provided an appendix explaining how to manipulate the distributions they discuss in the book using Mathematica. This was not new to me, but I can imagine it would save others some headaches.

I sued this book more than once to teach because it was the mandatory textbook in my college. Here is my brief assessment for this book. It is not suitable for a first course in probability. It may be useful only to those who will study for actuarial exams. Also the focus of the book does not apply to students of other disciplines. Chapter 2 is useless. You may start your course with chapter 3 because all you cover in chapter 2 will be covered again in the following chapters. The attempt to present discrete continuous and mixed variable in `an one fits all' manner is futile and confusing to the students. The book has some examples and probably the only good part of it is the examples. The problems often include stupid questions that offer insignificant observations and the problems that you can work with are quite difficult for students with no prior experience to probability theory. Overall, if you are teaching a first course on serious probability theory (a first course on random variables) stay away from this book at all cost.

Having never taken any statistics (but with a BS and MA in math), I was looking for a good text to prepare for the actuarial exams. The good news is: this book is great at explaining probability theory. The author does a GREAT job at explaining probability density functions in one and several variables, to include conditional and marginal distributions. He presents the various common distributions, tells you the formulas, what they are used for, and how they relate to each other in a very natural way.

I read this book cover to cover twice, did the released exam P problems and some sample exams, and aced the actual exam.

Don't buy this book if you just want practice problems. The questions in the book are quite frankly all over the place, and don't look much like the problems you could expect to see on the exam. It's good for what it is: a presentation of the material on the exam with some decent examples and no real practice problems. Get a supplement to work some problems if you need it.

The author has ,unfortunately,incorrectly categorized the subject matter that he is dealing with in his book.The book deals with known probability distributions that are continuous or discrete.One can calculate the mean,variance,and standard deviation .This means that one is dealing with risk,not uncertainty .The author correctly emphasizes that all the information(sample space of all possible outcomes) must be known for each probability distribution to be applied in advance of any decision.

The author discusses Keynes's principle of indifference under the heading equal likelihoods/principle of nonsufficient reason.He overlooks the major thrust of Keynes's position ,which was that ,especially in the fields of social science,liberal arts,economics,finance,business,education,behavioral science,and everyday practical decision making,the decision maker does NOT have the complete information set necessary to specify a particular probability distribution.This problem is generally dealt with by actuaries under the title " credibilities ".

THe book does a good job of illustrating the application of mathematical probability in cases where the laws of addition and multiplication can be applied .Applications of decision trees ,tree diagrams,combinations ,permutations,probability distributions,etc.,are presented effectively.

I recommend the book for individuals who are interested in mathematical probability and the concept of mathematical risk.

As a statistics graduate, I found it hard to understand this book. There are not many friendly examples to help the readers to understand the concepts, even with the help of solution manual. There are some mistakes too.

Some gaffes in this book, I don't think the author has any real understanding. He even messes up the definition of expectation, and it doesn't get more elementary than that. There are many better probability books out there, don't choose this one.