Editing Extreme Value Theory (section)

== <span style="color: #FFFFFF;">Remembering</span> ==
* '''Extreme Value Theory (EVT)''' — A branch of statistics dealing with the extreme deviations from the median of probability distributions.
* '''The Three Gs (Distributions)''':
** '''Gumbel''' — For thin-tailed events (e.g., the fastest wind speed this year).
** '''Fréchet''' — For fat-tailed events (e.g., the wealth of the richest person).
** '''Weibull''' — For bounded events (e.g., the maximum age a human can reach).
* '''Return Period''' — The average time between extreme events (e.g., a "100-year flood" has a return period of 100 years).
* '''Block Maxima''' — A method of finding extremes by looking at the "Maximum" in a fixed block of time (e.g., the highest temperature every year).
* '''Peaks Over Threshold (POT)''' — A method of looking at all events that "Cross a dangerous line" (e.g., all floods higher than 5 meters).
* '''Fat Tails''' — Distributions where extreme events are "More likely" than a normal Bell Curve would suggest (e.g., Stock crashes).
* '''Generalized Extreme Value (GEV) Distribution''' — The "Master Formula" that combines Gumbel, Fréchet, and Weibull into one.
* '''Tail Index''' — A number that describes "How Fat" the tail is (how much "Risk" is in the extremes).
* '''The Black Swan''' — Nassim Taleb's term for an extreme event that is "Unpredictable," "High-Impact," and "Explained away" after it happens.
* '''VaR (Value at Risk)''' — A financial measure of the "Worst-case scenario" (usually 95% or 99% certainty).
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