expected value

ex·pect·ed value

(ĭk-spĕk′tĭd)n.1. A quantity expressing a typical or average value of a random variable.2. The sum (for discrete variables) or integral (for continuous variables) of the product of a random variable with its probability density function, over its range of values.

expected value

n (Statistics) statistics the sum or integral of all possible values of a random variable, or any given function of it, multiplied by the respective probabilities of the values of the variable. Symbol: E(X). E(X) is the mean of the distribution; E(X–c) = E(X)–c where c is a constant. Also called: mathematical expectation

Thesaurus

Noun

expected value - the sum of the values of a random variable divided by the number of valuesarithmetic mean, first moment, expectationstatistics - a branch of applied mathematics concerned with the collection and interpretation of quantitative data and the use of probability theory to estimate population parametersmean, mean value - an average of n numbers computed by adding some function of the numbers and dividing by some function of n

expected value

[ek′spek·təd ′val·yü] (mathematics) For a random variable x with probability density function ƒ(x), this is the integral from -∞ to ∞ of xƒ (x) dx. Also known as expectation. For a random variable x on a probability space (Ω, P), the integral of x with respect to the probability measure P. (systems engineering) In decision theory, a measure of the value or utility expected to result from a given strategy, equal to the sum over states of nature of the product of the probability of the state times the consequence or outcome of the strategy in terms of some value or utility parameter. Abbreviated EV. Also known as expected utility (EU).

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.

expected value

ex·pect·ed value

expected value

expected value

expected value

Expected value

Expected value

Expected Return

expected value

Synonyms for expected value

noun the sum of the values of a random variable divided by the number of values

Synonyms

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