Question

What is the concept of EMV and EVPI?

Answer 1

$\huge\mathfrak\red{ANSWER}$

✔In stock investing ending market value (EMV)signifies the value of an investment at the end of an investment period.

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✔In decision theory the expected value of perfect information (EVPI) is the price that one would be willing to pay in order to gain access to perfect information.

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Answer 2

Ending market value (EMV) and Expected value of perfect information (EVPI)

Step-by-step explanation:

Ending market value (EMV) and Expected value of perfect information (EVPI)

ending market value value (EMV):

In stock investing, ending market value (EMV) signifies the value of an investment at the end of an investment period. In private equity, ending market value (also called the residual value) is the remaining equity that a limited partner has in a fund.

The Formula for EMV Is

             EMV=BMV×(1+r)

where:

BMV=Beginning market value

r=Interest rate

​Expected value of perfect information (EVPI)

In decision theory, the expected value of perfect information (EVPI) is the price that one would be willing to pay in order to gain access to perfect information.

The Formula for EVPI Is

EVPI = EPC - EMV

Where

EPC is Expected Payoff under Certainty

EMV is ending market value

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