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# Expected Value, Risk Measurement and Relative Risk

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Hello,

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

##### 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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