GIGAMIND
Folder:
113 Math
File:
113.036 Statistics - Expected Value
Expected Value
Expected value is the probability weighted average of the possible outcomes. More probable outcomes will have more weight.
In finance, expected value is used a lot. E.g. "expected value of earnings per share", "dividend per share", "rate of return", etc
- E(X) = P(x_1)x_1 + P(x_2)x_2 + ... + P(x_n)x_n
Tags:
- statistics
- decision-making
Relevant:
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- 202011211245 Expected value and Economic Decision Making
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