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expected rate of return

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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%.

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A model for determining the required or expected rate of return on an asset.
A model for determining the required or expected rate of return on an asset.
Some 78 percent of the companies lowered their expected rates of return in 2003, with the median expected rate of return at 8.
 
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