MEASURING THE CENTER OF THE DISTRIBUTION––THE FIRST MOMENT

The first moments of the distribution of outcomes measure the expected rate of return on a particular project. They measure the location of the project’s scenarios and possible outcomes on average. The common statistics for the first moment include the mean (average), median (center of distribution), and mode (most commonly occurring value). Figure 3.1 illustrates the first moment––where in this case, the first moment of this distribution is measured by the mean (μ) or average value.

error: Content is protected !!