Extreme Value Theory (EVT) is a statistical approach used to analyze the behavior of extreme events, such as floods, earthquakes, or stock market crashes. It helps in understanding the probability and potential impact of rare occurrences that lie far from the average. By focusing on the maximum or minimum values in a dataset, EVT provides insights into the likelihood of extreme outcomes. This theory is particularly useful in fields like meteorology, finance, and engineering, where predicting rare events is crucial for risk management. EVT allows researchers and professionals to make informed decisions based on the statistical properties of extreme values, enhancing safety and preparedness.