certainty equivalent

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Certainty equivalent

An amount that would be accepted today (risk free) in lieu of a chance to receive a possibly higher, but uncertain, amount.

Certainty Equivalent

A small, zero-risk return an investor may trade for a larger potential return with an associated risk. Companies offer certainty equivalent returns on certain investments and use their demand to determine the level of risk an investor will accept for a given return from the company.

certainty equivalent

The minimum sum of money a person would accept to forgo the opportunity to participate in an event for which the outcome, and therefore his or her receipt of a reward, is uncertain. For example, suppose you are told to draw one card from a full deck of cards. If you draw a red card you win $100 and if you draw a black card you win nothing. If you would accept $40 to forgo the selection and possibility of winning, $40 is the certainty equivalent of the outcome of the event. Certainty equivalents are used in evaluating risk.

certainty equivalent

see DECISION TREE.
References in periodicals archive ?
Virgin Money mortgages director Andrew Asaam said: "Fixed rates of longer than 10 years are not generally available in the UK market but, given the economic backdrop, they can be a perfect choice for borrowers who are looking for longer interest rate certainty."
For more information on Project Certainty, visit www.Emerson.com/project-certainty
The rights and obligations of the alpine operators remain at the current level, but the self-responsibility of leisure seekers will be increased, which ensures more legal certainty on the pastures and a better coexistence, VP mandate Georg Strasser summarized the changes from the perspective of his group.
The reasonable certainty principle is addressed in many cases and is usually successfully met when damages have been calculated using assumptions that are not speculative.
Isn't the reality that this is a bad deal for Wales, failing to give Welsh people the certainty needed to safeguard jobs and livelihoods?" Mr Cairns replied: "The deal that the Prime Minister has negotiated gives the certainty of access to the EU markets but it also gives us the new opportunities to strike trade deals around the world.
"We have cleared the final major legal hurdle in our Brexit plans which will enable us to offer our clients, partners and colleagues certainty that AIG is ready to overcome the challenges posed to the insurance industry by Brexit, regardless of the UK's future relationship with the European Union," he said.
Belief, according to Wikipedia, is the state of mind in which a person thinks something to be the case with or without there being empirical evidence to prove that something is the case with factual certainty.
They brought the certainty of fear and terror to the countries they were allowed to dominate.
Critique: An inherently fascinating, informative, and thought-provoking read from cover to cover, "The Illusion of Certainty: How the Flawed Beliefs of Religion Harm Our Culture" is a meticulously written work of exceptional scholarship and unreservedly recommended for both community and academic library Psychology of Religion collections and supplemental studies lists.
Law scholars from various jurisdictions present research from a range of substantive areas regarding the meaning, possibility, and desirability of legal certainty in the context of a rapidly changing global society.
The CAR-T technology, exclusively licensed to Certainty, is initially focused on ovarian cancer, with potential future applications in prostate, pancreatic, and other cancers as well.
SIR Michael Fallon has said that "no other industry has as much certainty" as shipbuilding on the Clyde.