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Line 23:
Line 23: − + − ! Outcome − ! Consequence – Cost − ! Profit/Loss × Probability = − ! Risked Result − + − − − − − |+ − − − − − + − − − | −
Risk: expected value and chance of success (view source)
Revision as of 19:00, 3 April 2014
, 19:00, 3 April 2014→Expected value concept
|+ {{table number|1}}Expected value examples (Coin Toss)
|+ {{table number|1}}Expected value examples (Coin Toss)
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|-
! Trial
! Trial || Outcome || Consequence – Cost || Profit/Loss × Probability = || Risked Result
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|-
| Free trial
| rowspan=3 | Free trial || Correct call || +[[cost::20,000 USD]] – 0 = || +[[cost::20,000 USD]] × 0.5 = || +[[cost::10,000 USD]]
| Correct call
| +[[cost::20,000 USD]] – 0 =
| +[[cost::20,000 USD]] × 0.5 =
| +[[cost::10,000 USD]]
|-
|-
| Incorrect call || 0–0 = || 0 × 0.5 = || 0
| Incorrect call
| 0–0 =
| 0 × 0.5 =
| 0
|-
|-
|
| colspan=3 align=right | || EV =+[[cost::10,000 USD]]
|
|
| EV =+[[cost::10,000 USD]]
|-
|-
| [[cost::10,000 USD]] trial
| [[cost::10,000 USD]] trial