| Dictionary, Encyclopedia and Thesaurus - The Free Dictionary 1,885,750,331 visitors served. |
|
Dictionary/ thesaurus | Medical dictionary | Legal dictionary | Financial dictionary | Acronyms | Idioms | Encyclopedia | Wikipedia encyclopedia | ? |
Expected Value |
Also found in: Dictionary/thesaurus, Medical, Legal, Acronyms, Idioms, Encyclopedia, Wikipedia, Hutchinson | 0.01 sec. |
|
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. |
|
| ? Mentioned in | ||||
|---|---|---|---|---|
|
| Financial Dictionary |
| Free Tools: |
For surfers:
Free toolbar & extensions |
Word of the Day |
Help
For webmasters: Free content | Linking | Lookup box | Double-click lookup | Partner with us |
|---|