This unique text differs from most intermediate probability texts in that it focuses the theory directly on applications in the general field of financial risk management, including insurance, economics and finance. It will be appropriate for a first course in probability for students having two semesters of calculus.

It was designed for several audiences, including students of actuarial science, mathematical economics, finance and risk management.

This book will serve as an excellent background text for the more advanced probability material included on the Exams M and C of the SOA and Exams 3 and 4 of the CAS.

It will provide an interesting and appropriate preparation for mathematically gifted students in finance and economics. It is not abstract or proof-oriented. Rather, it shows the student how to use probability theory to solve real-world problems.

This text is listed on the Course of Reading for the Exam P of the Society of Actuaries and the Exam 1 of the Casualty Actuarial Society.

The second edition contains the following changes from the first edition:

• All footnotes and references have been updated to reflect new editions of other texts.
• Data from statistical reports have been updated.
• There have been a number of section rewordings for difficult topics.
• Additional past exam problems have been added that cover each topic in the exercise section.

The following new sub-sections have been added:

• Percentiles of the normal distribution
• Continuity correction
• Multinomial distribution
• Minimum and maximum of any two independent random variables
• Bivariate normal
• Joint moment generating functions

A separate solutions manual for the text exercises is also available. Please see the Related Items Tab for a direct link

"The book is well written and easily understandable." -- Thomas S. Tredway, Associate Professor, Georgia State University

"Very clear and concise without compromising content." -- Alan Chambless, Student

"Probability for Risk Management" is the most readable mathematics text on the market. The explanations and examples are clearly explained with supplementary problems at the end of each chapter to assist in learning the material. An excellent text for any interested student of mathematics and probability." -- Andrew McKenna, Probability Student

I wanted to thank Dr. Hassett and everybody at ACTEX who helped me pass this exam. Dr. Hassett's textbook prepared me very well for the exam. In fact it was the only book I used. Considering the fact that I am coming back to mathematics after a hiatus of 13 years, I was really apprehensive about my preparation techniques and math acumen. Dr. Hassett's book came in very handy -- it is so well tailored to the Exam P syllabus that I did not have to look anywhere else for theory and introductory problems. I passed Exam P with a grade of 8." -- S. Baskaran, Exam P Student