Which of the following describes a key component of expected value?

The key component of expected value is the combination of different outcomes with their associated probabilities. Expected value is a statistical measure that provides a way to calculate the average outcome of a random event when considering all possible scenarios and their likelihoods. By multiplying the value of each outcome by the probability of that outcome occurring, and then summing these products, you arrive at the expected value. This process effectively weighs each potential outcome by how likely it is to occur, giving a comprehensive view of what one can anticipate on average from uncertain events.

In contrast, relying solely on subjective assessments does not provide a quantitative basis for expected value, and simply adding probabilities without considering outcomes does not yield meaningful results. Lastly, basing calculations purely on past performance overlooks the importance of current probabilities and possible outcomes, which are essential for determining expected value accurately.