# Expected Value, Risk Measurement and Relative Risk

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I am looking to compare the work and formulas for the calculation of Expected Value, Absolute Risk Measurement, and Relative Risk for both projects. I have the answers, however, my textbook is horrible in explaining the work.

Project A

Probability Cash Flow

0.5 $200,000

0.5 $300,000

Project B

Probability Cash Flow

0.05 $0

0.80 $200,000

0.15 $400,000

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##### Solution Summary

The solution related to expected value and other calculations of project A and B is posed.

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I am looking to compare the work and formulas for the calculation of Expected Value, Absolute Risk Measurement, and Relative Risk for both projects.

Project A Project B

Probability Cash Flow Probability Cash Flow

0.50 $200,000 0.05 $0

0.50 $ 300,000 0.80 $ 200,000

0.15 $ 400,000

Solution:- Calculation of Expected value of each project

If X is a discrete random variable with probability mass function p(x), then the expected value becomes

Project A

Probability Cash flow Expected ...

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