Enterprise Risk Management Slides

Stress testing incorporating causal dependency [16]

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Bullet points include: Given two events, Ei and Ek, how does knowing whether event Ek occurs alter the marginal probability of Ei occurring, i.e. is P(Ei | Ek) > , = or < P(Ei) Define: Bayes theorem implies that We have: Deterministic causation: Independence: Mutual incompatibility:

Bullet points include: Given two events, Ei and Ek, how does knowing whether event Ek occurs alter the marginal probability of Ei occurring, i.e. is P(Ei | Ek) > , = or < P(Ei) Define: Bayes theorem implies that We have: Deterministic causation: Independence: Mutual incompatibility:

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