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the application of probability

the application of probability
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Answer #1

Probability refers to chance and application of probability in the field of finance is used as a tool for modeling risk and return of financial securities and of financial markets.

Application of probability and statistics can help to draft effective monetary and fiscal policies and to develop various pricing models for valuation of financial assets like equities, bonds, derivatives and currencies,

Another real world applications of probability in finance is in the field of management of  portfolio and its expected risk and return.

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