We have attempted to make UEP intuitive. Hovering the mouse pointer above entry titles, radio buttons, entry fields, and other areas for brief descriptions. Click the Symbols link for a quick reference to key variables and parameters.
Please visit (how you got to UEP):
Login, if you're not already, and you will find:
There, click either the “Utility Elicitation Program” video or the “UEP User Guide” pdf document
Here are the symbols in UEP and brief definitions:
Symbol or Term
Certain equivalent. This is the cash-in-hand value of a risk.
Discounted Return on Investment. DROI = EMV / |-NPVf|. This is a popular ranking criterion with limited capital.
Expected Monetary Value = expected value NPV.
Expected (value) Utility.
Net Present Value of the Success (or best or bad) outcome.
Net Present Value of the Failure (or good or worst) outcome.
For CE questions and both outcomes are positive:
NPVf = good < best = NPVs.
For CE questions and both outcomes are negative:
NPVf = worst < bad = NPVs.
Probability of success. Or, probability of the better outcome.
Probability of success at BreakEven (where EMV = 0).
P(profit with 10)
The probability of NPV>0 for a portfolio of 10 identical, independent projects like this one. Alternate symbol: "Ps 10X".
r or RTC
Risk Tolerance Coefficient (RTC or r). This the scaling factor for risk policy. Helping you assess r is the purpose and outcome of UEP. Higher r means you are more risk-tolerant.
Fractional ownership of a large project or large risky asset. The optimal Share gives you the highest CE.
NPVf < CE ≤ EMV As r → ∞, CE → EMV As r → 0, CE → NPVf
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That same page leads to a UEP User Guide plus other documents and videos.
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