Cost Risk

Expected Value (EV) Definitions

• Probability: The likelihood of occurrence. The ratio of the number of chances by which an event may happen (or not happen) to the sum of all chances of happening and not happening
• Expected Value: The product of an event�s probability of occurrence and the gain or loss from the result
• Standard Deviation: A measure of the dispersion of possible outcomes (The root mean square of variances of probability distribution)
• Variance: (value - mean)2 for a point on a distribution

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