The expected loss for a given risk is the weighted average of all of the possible amounts of loss from that risk, weighted according to their probabilities. The expected loss is (.05 × $50,000) + (.15 × $70,000) + (.40 × $95,000) + (.25 × $110,000) + (.10 × $130,000) + (.05 × $150,000) = $99,000 $95,000 is the amount of loss associated with the highest probability of occurring. The expected loss for a given risk is the weighted average of all of the possible amounts of loss from that risk, weighted according to their probabilities. $100,000 is the average of the highest possible loss ($150,000) and the lowest possible loss ($50,000). The expected loss for a given risk is the weighted average of all of the possible amounts of loss from that risk, weighted according to their probabilities. $100,833 is the unweighted average of all the possible losses. The expected loss for a given risk is the weighted average of all of the possible amounts of loss from that risk, weighted according to their probabilities.
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