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Expected return (view source)

Revision as of 19:37, September 1, 2007

28 bytes added ,  19:37, September 1, 2007
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The expected return is the average of the possible returns, each weighted by its probability.   
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The expected return is the average of the possible returns, each weighted by its [[probability]].   
    
For example, if an investment has a 50% chance of earning a 5% return, a 25% chance of earning 10% and a 25% chance of losing 10%, then its expected return would be calculated as follows:
 
For example, if an investment has a 50% chance of earning a 5% return, a 25% chance of earning 10% and a 25% chance of losing 10%, then its expected return would be calculated as follows:
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[[Category:Economics]]
 
[[Category:Economics]]
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[[Category:statistics]]
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