Expected value

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Expected value

The weighted average of a probability distribution. Also known as the mean value.

Expected Return

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. For 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 return is calculated as:

Expected Return = 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. See also: Abnormal return.
References in periodicals archive ?
What is more, applying the result of f (c) into equation (13), mathematical expectation E([c.
d) The items provided by supplier contain a percentage p of defective items, where p is a random variable over interval [a, b] with the probability density function f(p) and the mathematical expectation [mu], where 0 < a, b < 1.
The mathematical expectation of the number of children of the families which have two boys for the first time is equal to 4.
In the next section of paper we discuss results of development of algorithms which select the informative attributes of non-stationary object, where the simplified ratings of mathematical expectation, dispersion, functions of times series distribution are accepted as statistical parameters.
y] are evaluations of the mathematical expectation of values of X and Y; D([bar.
Mathematical expectations about the likely effects of policy may be uncertain, but private-sector trepidation can also arise when governments attempt to increase economic activity in a haphazard manner.
and because [lambda](n) is, according to (7), a ratio of mathematical expectations and, hence, deterministic, we have for the excess mean square error (EMSE) of the combination
His model can be looked at as an objective expected hypothesis (OEH) that preserves the mathematical expectation by introducing a non-linear utility function which was extended by von Neumann and Morgenstern (1944).
Mathematical expectation describes regular changes of a load, such as general trend and seasonal, weekly, and daily periodicity.
i], mathematical expectation [alpha], standard deviations SD.
After we present some methods of counting, we examine probability theory, including topics from set theory, rules for calculating probabilities, revision of probabilities, and mathematical expectation.

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