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Investments glossary

Expected Utility

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Quotes of the day:

Truth may be stretched, but cannot be broken, and always gets above falsehood, as does oil above water.

— Miguel Cerbantes

Expected utility is an economic term summarizing the utility that an entity or aggregate economy is expected to reach under any number of circumstances. The expected utility is calculated by taking the weighted average of all possible outcomes under certain circumstances, with the weights being assigned by the likelihood, or probability, that any particular event will occur.


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