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

National income, National income: The national income or product ...

National income: The national income or product or expenditure provides a measure of total value at factor cost of final goods and services, which are available either fo

Market supply labour, use a graphical illustration to describe briefly what...

use a graphical illustration to describe briefly what the influence of each of the following be on the market supply of labour,(a) an increase in immigrants, (b) a reduction in wag

Economic problems, economic problems are faced by all types of economies bu...

economic problems are faced by all types of economies but they are dealt with differently in different types of economies.discuss

What is meant by labor force, What is meant by labor force?    In econom...

What is meant by labor force?    In economics the labor force is the group of people who have a potential for being employed. Normally, the labor force having of everyone above

Demand supply and price, Ask question # The price of Canadian-grown peaches...

Ask question # The price of Canadian-grown peaches skyrockets during an unusually cold summer that reduces the size of the peach harvest. b. An increase in income leads to an incr

Perfect market, For the pizza seller whose marginal, average variable, and ...

For the pizza seller whose marginal, average variable, and average total cost curves are shown in the graph below, what is the profit-maximizing level of output and how much profit

Selective in exports, Selective in Exports: There are many industries ...

Selective in Exports: There are many industries where India has an advantage because of relatively lower costs of all forms of manpower whether it is professional or factory l

Analysing the digital economy relative to e business, Problem: a) What ...

Problem: a) What factors would you consider when analysing the digital economy relative to e business? b) "The growing use of the internet by consumers and businesses has re

Physical chemistry, Calculate the enthalpy change for stepE. that is for th...

Calculate the enthalpy change for stepE. that is for the reaction: Na(s)+ water (arrow) Na(ion)+ OH(ion)+ Hydrogen (g)

305, price effect

price effect

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