Worry Value is defined as the difference between Pmax and P*?

Worry Value is defined as the difference between Pmax and P*?

• A. P* - Pmax
• B. Pmax - P*
• C. P* + Pmax
• D. Pmax / P*

Answer: (B)

Worry Value measures the gap between the best possible price and the price you actually get or expect to get. That means you subtract the actual price from the maximum you could have achieved. The result is nonnegative, representing how much you miss out on by not reaching the maximum. So Worry Value equals Pmax minus P*. If the maximum is 120 and the realized/expected price is 100, the Worry Value is 20. Writing it as P* minus Pmax would yield a negative number, which doesn’t reflect a deficit. Adding or dividing the two prices would describe a different relationship, not the shortfall.

Worry Value measures the gap between the best possible price and the price you actually get or expect to get. That means you subtract the actual price from the maximum you could have achieved. The result is nonnegative, representing how much you miss out on by not reaching the maximum. So Worry Value equals Pmax minus P*. If the maximum is 120 and the realized/expected price is 100, the Worry Value is 20. Writing it as P* minus Pmax would yield a negative number, which doesn’t reflect a deficit. Adding or dividing the two prices would describe a different relationship, not the shortfall.