# Expected value

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## Expected value

The weighted average of a probability distribution. Also known as the mean value.

## 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.
References in periodicals archive ?
Expectation and Conditional Expectation Operators. For the Riesz mapping R, using Theorem 12, we can prove that [R.sub.[eta]] [member of] [S.sup.*.sub.](Z) for all [eta] [member of] [L.sup.2](Z).
where [E.sub.n] denotes the expectation operator over the distribution of [mathematical expression not reproducible], am is contractual strike price, N(x) is the cumulative normal distribution function, and
To examine the weighted composition operators effectively Alan Lambert  associated conditional expectation operator E with T as E(x/[T.sup.-1][summation of])=E(x) x E(f) is defined for each non-negative measurable function f [member of] [L.sup.p] (1 [less than or equal to] p) and is uniquely determined by the conditions
To examine the weighted composition operators efficiently, Lambert , associated with each transformation T, the so called conditional expectation operator E([??]|[T.sup.-1][Sigma]) = E([??]).

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