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Expected Value |
Also found in: Acronyms, Encyclopedia, Wikipedia, Hutchinson | 0.03 sec. |
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Expected value The weighted average of a probability distribution. Also known as the mean value. Expected Value The return on an investment as estimated by an asset pricing model. It is calculated by taking the average of the probability distribution of all possible returns. To give a very simple example, a model might state that an investment has a 10% chance of a 100% return and a 90% chance of a 50% return. The expected rate of return is calculated as: Expected Value = 0.1(1) + 0.9(0.5) = 0.55 = 55%. It is important to note that there is no guarantee that the expected rate of return and the actual return will be the same. Statistically, the expected value is the mean value of the probability distribution. It is also called the expected rate of return. See also: Abnormal return. How to thank TFD for its existence? Tell a friend about us, add a link to this page, add the site to iGoogle, or visit webmaster's page for free fun content. |
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| The combined Expected Monetary Value of just the mature prospects, Net to Lodore, is in the region of US$900 million. As can be seen, the practice will have the highest expected monetary value by ordering 200 doses of vaccine. The method took the form of a risk analysis incorporating expected monetary value (EMV) techniques for management decision support. |
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