expected value

expected value
EV The quantifiable, expected result of a course of action whose outcome is uncertain. Expected values are often used in *decision theory, and are calculated by multiplying the expected outcomes of decisions by the *probabilities of their occurrence. See also *decision tree.

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  • expected value of perfect information — The expected value if the future uncertain outcomes could be known minus the expected value with no additional information. Bloomberg Financial Dictionary …   Financial and business terms

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