Expected value, Microeconomics

Assignment Help:

Expected Value

- The weighted average of payoffs or values resulting from all the possible outcomes.

  • The probabilities of every outcome are used as weights
  • Expected value measures central tendency; payoff or value expected on an average

- An Example

  • Investment in drilling exploration:
  • The outcomes that are possible is two

-  Success -- stock price increase from $30 to $40/share

-  Failure -- stock price decrease from $30 to $20/share 


Related Discussions:- Expected value

Oligopoly, what makes it differ from other market structures

what makes it differ from other market structures

Theories of microeconomics, Theories and Models ?? Microeconomic ...

Theories and Models ?? Microeconomic Analysis             – Theories are taken in use to describe the observed phenomena in terms of a set of essential  rules and

Creating mobile telephone infrastructure, Creating Mobile Telephone Infrast...

Creating Mobile Telephone Infrastructure: The second concept of subsidising the telecom infrastructure required for providing services in rural and remote areas is designed to

The concept of consumer surplus, consumer surplus and elasticity of demand ...

consumer surplus and elasticity of demand assumption of consumer surplus criticisms of consumer surplus consumer surplus in terms of indifference curves importance of the concept o

Marginal revenue, Marginal revenue: Marginal revenue is the change in ...

Marginal revenue: Marginal revenue is the change in total revenue with respect to a change in quantity sold. That is, it is the change in total revenue that results from the s

External stability, Really briefly, what are 2 methods of measuring externa...

Really briefly, what are 2 methods of measuring external stability? In Australia generally.

Describe customer-firm relationship, Question 1: "The rush of new and e...

Question 1: "The rush of new and existing enterprises to exploit the opportunities presented by the internet economy is giving rise to new business models". Discuss. Ques

The supply curve , The Supply Curve  – The supply curve exhibits how mu...

The Supply Curve  – The supply curve exhibits how much of a good manufacturerss are willing to sell at a particular given price, holding constant  other factors that can aff

Stockholders and managers, Normal 0 false false false E...

Normal 0 false false false EN-IN X-NONE X-NONE MicrosoftInternetExplorer4 1. Suppose that the

Marginal utility., marginal utility is applied on money or not

marginal utility is applied on money or not

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd