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Risk: expected value and chance of success
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Revision as of 19:00, 3 April 2014
40 bytes added
,
19:00, 3 April 2014
→Expected value concept
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Line 23:
|+ {{table number|1}}Expected value examples (Coin Toss)
|+ {{table number|1}}Expected value examples (Coin Toss)
|-
|-
−
! Trial
+
! Trial
||
Outcome
||
Consequence – Cost
||
Profit/Loss × Probability =
||
Risked Result
−
!
Outcome
−
!
Consequence – Cost
−
!
Profit/Loss × Probability =
−
!
Risked Result
|-
|-
−
| 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
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