Expected Return

Expected Return

The expected return on an investment is the likely future value of that investment based on a probability curve. Investors can calculate expected returns by multiplying a range of potential returns by the probability of each outcome and adding the results. Calculating how likely it is that a given investment will yield a given (positive or negative) return and what the return is likely to enable investors to judge the level of risk for the level of expected return over the risk-free rate of return.

logo-animationlogo-animationlogo-animation

Related terms