The Law Dictionary

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EXPECTED VALUE Definition & Legal Meaning

Definition & Citations:

(1) The MEAN of a distribution of values that a random variable can take. (2) The value that is obtained given certain possible outcomes and probabilities of occurrence. In financial RISK MANAGEMENT terms this is often summarized as frequency (probability) times severity (outcome), or: where Prob is the probability of occurrence , O1 is outcome 1 and 02 is outcome 2.


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