An expected value is:
A)a simple average of a set of scenarios or possible outcomes
B)a weighted average of a set of scenarios or possible outcomes
C)the highest scenario value or outcome
D)the lowest scenario value or outcome

Question

Quizplus · Accepted Answer

An expected value is a weighted average of a set of scenarios or possible outcomes. This is because each scenario or outcome is assigned a probability or weight, and the expected value is calculated by multiplying each scenario/outcome by its respective probability/weight and then summing the products. This provides a more accurate representation of the potential outcomes than a simple average, as it takes into account the likelihood of each scenario/outcome occurring.

An Expected Value Is