Review of The Drunkard's Walk - How Randomness Rules Our Lives by Mlodinow

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Read the book "The Drunkard's Walk - How Randomness Rules Our Lives" by Mlodinow and pay special attend to the following questions. Some of these questions may appear on quizzes and exams.

Chapter 1 Peering through the Eyepiece of Randomness

1. Explain the phenomenon "regression toward the mean."
In any series of random events an extraordinary event is most likely to be followed, due purely to chance, by a more ordinary one.

2. What factors determine whether a person will be successful in career, investment, etc.?
Success in our careers, in our investments, and in our life decisions, both major and minor—is as much the result of random factors as the result of skill, preparedness, and hard work.

3. Was Paramount's
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3. Do psychics exist?
4. What is tolerance of error, tolerance of uncertainty, statistical significance?
5. Describe some applications from the book of the law of large numbers and the law of small numbers.

Chapter 6 Bayes's Theory

1. Two-daughter problem
In a family with two children, what are the chances that both children are girls?
Ans: 25%

In a family with two children, what are the chances, if one of the children is a girl, that both children are girls?
Ans 33%

In a family with two children, what are the chances, if one of the children is a girl named Florida, that both children are girls?
Ans: 50%

2. How to apply Bayes's Theory to determine car insurance rates?
Ans : Models employed to determine car insurance rates include a mathematical function describing, per unit of driving time, your personal probability of having zero, one, or more accidents. Consider, for our purposes, a simplified model that places everyone in one of two categories: high risk, which includes drivers who average at least one accident each year, and low risk, which includes drivers who average less than one. If, when you apply for insurance, you have a driving record that stretches back twenty years without an accident or one that goes back twenty years with thirty-seven accidents, the insurance company can be pretty sure which category to place you in. But if you are a new driver, should you be classified as low risk

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