Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and ...

For any event that has multiple outcomes with different probabilities, it can be helpful and illustrative to construct a chart or diagram of the possible outcomes. Tree diagrams are a useful example ...

Two events are independent if the probability of the first event happening has no impact on the probability of the second event happening. For example, the probability of rolling a 6 on a die will not ...

Tree diagrams are a visual way of showing all possible outcomes of two or more events. Each branch is a possible outcome and is labelled with a probability. Two events are independent if the ...