Expected Return

Market Terms

We don't know everything about the markets.  We're just devoted to learners.  Taken from those smarter than ourselves, here's how we define Expected Return.

The profit (or loss) that an investor anticipates based on how an asset has behaved historically.  Investors are able to determine these patterns based on the historical Rates of Return.  This figure is calculated by multiplying a potential outcome by the odds of that outcome occurring then totaling the results.  Understanding expected return is crucial to Modern Portfolio Theory (MPT) as well as present-day business operations.