Misconception · MIS:utp-benefit-is-expected-value

Mistaken idea “Measure an uncertain tax benefit at expected value”

Mistaken reasoning: This mistake imports a probability weighted average model.

Updated Aug 21, 2026 Review due Nov 8, 2026

Why this is mistaken

Select the largest benefit amount whose cumulative probability exceeds 50 percent after ordering outcomes from largest to smallest.

Where to watch

When this mistake may appear

  • Several settlement outcomes are supplied.
Check your work

Your work may contain this mistake if:

  • Multiply each benefit by its probability and sum.