Suppose that the market has a 70% chance of being favorable and a 30% chance of being unfavorable. A favorable market will yield a profit of $300,000, while an unfavorable market will yield a profit of $20,000. What is the expected monetary value (EMV) in this situation?

Expected Monetary Value

A statistical measure used in decision-making under uncertainty, calculating the average outcome when future events have varying monetary values.

Profit

The financial gain achieved when the amount earned from goods or services exceeds the amount spent on their production or provision.