Expected return
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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:
- Expected Return = (0.5) (0.05) + (0.25) (0.1) + (0.25) (-0.1)
- = .025 + .025 - .025
- = 2.5%
See Also
- Essay:Invest in tangibles - Economic preparedness
- Inflation versus Interest rates / Rate of return-Expected return
- Self-directed IRA and IRA, 401(k), Roth IRA, 403(b), Retirement, Social security
- National debt: Debt Ceiling-Deficit spending and the Federal Reserve System's Ponzi scheme of Quantitative easing-Debt monetization devaluation of Fiat currency through Money supply-Treasury bills bought mostly by China and Japan
- John Maynard Keynes liberal Keynesian economics and Fabian Socialist influence on Barack Obama
- Big Government: Liberal ObamaCare-Common Core-Social Security Welfare state leads to Nanny state, leads to Gun control, Militarization of police, Asset forfeiture and Domestic mass surveillance of law-abiding citizens via the Police state: Globalist-United Nations-Statist-Socialist-National Socialist-Communist
Contrast with:
- Ludwig von Mises' conservative libertarian Austrian economics and Fiscal conservatism -Capitalist Conservative economic policies of Ron Paul
- Limited government implies: Conservative values/Traditional values - Modern conservatism - Modern preparedness are the original American Patriot Founding Fathers' values
- Modern preparedness: "if times get tough, or even if then don't", Debt is financial cancer, Tax is theft, Renewable energy, Financial security, You are in control of your life