Conditional Independence
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1. Context
In this topic taken from FRM Part 1 curriculum, we explore the concept of “Conditional Independence” and how it differs from (unconditional) independence. Essentially, remember that two events $A$ and $B$ are conditionally independent given event $C$ if the following hold true: $$ \Pr(A|B \cap C) = \Pr(A|C) \\ \Pr(B|A \cap C) = \Pr(B|C) \\ \Pr(A \cap B|C) = \Pr(A|C) \cdot \Pr(B|C) $$ This video is included in the FRM Part 1 preparation course. The details of the reading in which this topic appears are given below:
| Area | Quantitative Analysis |
| Reading | Fundamentals of Probability |
| Reference | Chapter 1. Fundamentals of Probability In GARP Official Books (FRM Part I, QA section) (GARP, 2020). |