ABSTRACT
Since most financial models represent random phenomena, in this chapter, the authors give a short introduction to the basic elements of Probability Theory and Statistics, which are the typical mathematical tools used in this framework. The authors provide some preliminary elements in probability. The authors discuss some standard synthetic indices of a distribution. Finally, the chapter is devoted to present some of the most frequently used probability distributions in finance. In the Subjective definition, the probability can be considered as the degree of confidence that an event will occur. It is determined by the information available to the individual and by his experience. To introduce some basic concepts of Probability Theory, as usual the authors consider the realizations of the throwing dice as an example of discrete events.
