1,237
edits
Changes
mLine 1:
Line 1: − +
bolding title
The expected return is the average of the possible returns, each weighted by its [[probability]].
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: