Expected Rate of Return financial definition of Expected Rate of Return. Expected Rate of Return finance term by the Free Online Dictionary.

Expected Return

The return on an investment as estimated by an asset pricing model. It is calculated by taking the average of the probability distribution of all possible returns. For example, a model might state that an investment has a 10% chance of a 100% return and a 90% chance of a 50% return. The expected return is calculated as:

Expected Return = 0.1(1) + 0.9(0.5) = 0.55 = 55%.

It is important to note that there is no guarantee that the expected rate of return and the actual return will be the same. See also: Abnormal return.

expected rate of return

The rate of return expected on an asset or a portfolio. The expected rate of return on a single asset is equal to the sum of each possible rate of return multiplied by the respective probability of earning on each return. For example, if a security has a 20% probability of providing a 10% rate of return, a 50% probability of providing a 12% rate of return, and a 25% probability of providing a 14% rate of return, the expected rate of return is (.20)(10%) + (.50)(12%) + (.25)(14%), or 12%.

Mentioned in	?		References in periodicals archive	?		Financial browser	?		Full browser	?
Characteristic Portfolio Efficient Portfolio Ex Ante Return Expected Future Return Expected Return Expected Return-Beta Relationship Expected Value Integer Programming Linear Programming Markowitz Efficient Portfolio Subclass yield to maturity	In addition, the expected rate of return should not only meet but exceed your company objectives. Identifying and Segmenting Customers by Will Peters / Advertising, marketing, public relations community The capitalization rate reflects the expected rate of return as described in Part 4. Do Your Own Business Valuation ? Part 7 Income-Based Valuation Methods by David Coffman / Business community When you find yourself behind on saving, it's tempting to change assumptions about the future--say, plug in a higher expected rate of return on assets. RETIREMENT: THE BIG RETHINK by Peter Coy / BusinessWeek	Exhaustion Exhaustion Gap ExIm Bank Existencias Existing Home Sales Exit Fee Exit Strategy Exogenous Exogenous Uncertainty Exogenous Variable Exordium Clause Exotic Option Expansion Expansion monetaria expansion option Expatriate Expectations Hypothesis Expectations Hypothesis Theories Expectations Index Expectations Theory of Forward Exchange Rates Expectativas inflacionarias Expected Dividend Yield Expected Future Cash Flows Expected Future Return Expected Rate of Inflation Expected Rate of Return Expected Return Expected return on investment Expected Return-Beta Relationship Expected Spot Rate Expected Value Expected Value of Perfect Information Expedited Funds Availability Act Expense Account expense ratio expense stop Expensed expenses Expenses of Sale Expensing Expensive Experian Experience Rating Expert system Expiracion Expiration Expiration Cycle Expiration Date Expiration Effect Expiration Friday Expiration Series	Expected number Expected number Expected number Expected Number of Decodable Frames Expected Number of Transmissions Expected Operating Life Expected Opportunity Loss Expected payoff Expected payoff Expected payoff Expected Peak Day Concentration Expected Performance Based Buydown Expected Performance Based Incentive Expected Period to Full Eligibility Expected Population Deviation Rate Expected Positive Exposure Expected Postretirement Benefit Obligation Expected Potential Exposure Expected Present Discounted Value Expected Probability of Detection Expected Progeny Difference expected progeny difference (EPD) expected progeny difference (EPD) expected progeny difference (EPD) expected progeny difference (EPD) Expected Progress Routing Expected Progress Routing with Acknowledgement Expected Quality Level Expected Quality-Adjusted Life-Year Expected rate of inflation Expected Rate of Return Expected Rates of Inflation Expected Rates of Return Expected Recovery Date Expected Recovery File Expected Reinsurer Deficit Expected Relative Positioning Routing with Congestion Avoidance Expected return Expected return Expected return Expected return Expected return Expected Return Beta Relationship Expected Return on Assets Expected return on investment Expected return on investment Expected Return to Service Expected return-beta relationship Expected Returns Expected Schoolwide Learning Results Expected Service Life Expected shortfall Expected Spot Rate Expected Start Timeout Expected Synchronization Delay Expected Tail Loss Expected Test Time Expected Throughput Expected Time of Arrival Expected Time of Berthing

Mentioned in

References in periodicals archive

Financial browser

Full browser

Characteristic Portfolio
Efficient Portfolio
Ex Ante Return
Expected Future Return
Expected Return
Expected Return-Beta Relationship
Expected Value
Integer Programming
Linear Programming
Markowitz Efficient Portfolio
Subclass
yield to maturity

In addition, the expected rate of return should not only meet but exceed your company objectives.

Identifying and Segmenting Customers by Will Peters / Advertising, marketing, public relations community

The capitalization rate reflects the expected rate of return as described in Part 4.

Do Your Own Business Valuation ? Part 7 Income-Based Valuation Methods by David Coffman / Business community

When you find yourself behind on saving, it's tempting to change assumptions about the future--say, plug in a higher expected rate of return on assets.

RETIREMENT: THE BIG RETHINK by Peter Coy / BusinessWeek

Exogenous Uncertainty

Exogenous Variable

Exordium Clause