The idea to write this book first came to me in the spring of 1995, shortly after I joined the faculty of the University of Michigan. At that time, a major review of the entire undergraduate curriculum was underway, the purpose of which was to ensure that undergraduate education remain relevant in the face of a rapidly changing world. About the same time, the Society of Actuaries, which oversees the education of actuaries in North America through the administration of its professional examinations, embarked on a major redesign of its own curriculum to keep abreast of the extraordinary changes taking place in the financial services industry. This time also saw the emergence of financial engineering as a new profession and the rise of programs in financial engineering and financial mathematics around the world. My goal in writing this book was to update the undergraduate probability curriculum to reflect these changes and to incorporate many of the new and interesting applications of probability arising in the fields of engineering, insurance, and investments.