What is probability of exceedance?

The probability of exceedance refers to the likelihood that a particular event or value will exceed a specified threshold within a given time frame. It is commonly used in fields such as risk assessment, hydrology, and finance to quantify the risk of extreme events, such as floods or market crashes. This probability can be expressed as a percentage and is often derived from historical data or statistical models. Understanding the probability of exceedance helps in making informed decisions regarding risk management and mitigation strategies.