Probabilistic modeling is a statistical approach used to represent uncertain situations and predict outcomes. It involves creating mathematical models that incorporate randomness, allowing us to understand and quantify uncertainty in various scenarios. For example, in finance, probabilistic models can help assess the risk of investments by estimating the likelihood of different market conditions. These models often use concepts from statistics and machine learning to analyze data and make informed decisions. By considering various possible outcomes and their probabilities, probabilistic modeling helps businesses, scientists, and researchers make better predictions and strategies in fields like healthcare, economics, and engineering.