A theory of INTEREST RATES indicating that the expectations of investors influence the TERM STRUCTURE of rates. Thus, if investors expect future rates will be higher than current rates, the YIELD CURVE

Statistical prediction on the number of claims that will occur in the contract year. T

The EXPECTED VALUE, or MEAN, of a statistical loss distribution function. The loss distribution function may be created to compute credit losses, INSURANCE losses, or other financial losses.

Total of the weighted payoffs as predicted outcomes related to one decision. The weightings relate to the likelihood, expressed as probabilities, of varied events generating the possible payoff. Mathematically, this is the

Mortality-table-based prediction of the likely, time-bound frequency of illness or injury to a specific group of people.

Mortality-table-based prediction of the likely, time-bound frequency of death in a specific group of people.

The method of predicting the likelihood, on average, of a gain from investing in a particular asset. Varying factors, representing market conditions and perceived asset worth, varies the predicted return.

A formulated, predictive return on an investment to help make a worthwhile investment decision . It is generated by calculating a series of potential results, filtering out unwanted ones by specific conditions,

The weighted average utility value or satisfaction from income or wealth that is derived from a particular activity. Utility is generally used in an economic or theoretical RISK MANAGEMENT framework; precise measurement

(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

Decision theory rule: chose the event with the greatest expected value (EV).

A theory of decision making that the expected value (EV) is the cost one willing pays to have access to perfect information.

Prioritize; do as quickly as possible, but attain the expected outcome; achieve results faster.

The monetary costs for attaining the desired result as quickly as possible. In fast tracking repairs or replacement of a lost or damaged asset, overtime, express transport, prioritizing will each likely cost

Unrepairable, consumed-when-used component or part, like a bolt, nut, or rivet (1) needing no authorized repair procedure; (2) having excessive repair cost exceeding replacement cost; (3) listed as un-returnable inventory at issue.

Settling an obligation, using an invoice type of document as evidence, by paying cash or by cash-equivalent for goods or services, or a charge against available funds. Refer to revenue expenditure, capital

A method of economic forecasting. The technique of adding consumption, government spending, investment and exports together as a measure of gross domestic product (GDP).

Simply, it is the difference between expected or budgeted expenses and actual, documented expenses. A cost overrun is an example of an expenditure variance.

1. Using known paid expenses for goods and services to determine one’s budget. 2. Using known paid expenses for goods and services to generate a financial plan.

Money spent or cost incurred in an organization’s efforts to generate revenue, representing the cost of doing business.