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by xtreme 873 days ago
I'm nitpicking, but the expected value for a project with a 50/50 chance of either (a) making $3m or (b) losing $1m is $1m. Not $2m.
2 comments
BossingAround 873 days ago
Just wondering, is it because 3 * 0.5 + (-1) * 0.5 = 1.5 - 0.5 = $1M?
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zamfi 872 days ago
yes
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zamfi 873 days ago
Ugh, you are totally right. I originally had making $5m but then changed it and not the EV :facepalm:
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