Business A-Level
expected value and net gain
What expected value and net gain means in Business A-Level, as defined for AQA.
Definition of expected value and net gain
Check what you remember
Read the wording for your board, then hide it and explain expected value and net gain in your own words. Rough notes are fine. This is a self-check, with no mark or grade.
Reference: AQA
At each circle every outcome is multiplied by its probability and totalled in pounds, and the net gain is that expected value less the cost of the branch leading to it.
Topics that use expected value and net gain
- Understanding management decision making (AQA A-Level)
Related terms
- business ethics
- decision trees
- external environment
- mission and objectives
- opportunity cost
- resource constraints
- risk and uncertainty
Using expected value and net gain in the exam
Check the command word and mark scheme for your exact question. After comparing your explanation with the reference, use the term in an answer on the linked topic. This practice does not predict an exam mark.
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