Enter the return rate and probability of up to 5 previous years to determine the expected rate of return of an investment.
- Required Rate of Return Calculator
- Expected Monetary Value Calculator
- Holding Period Return Calculator
Expected Rate of Return Formula
The following formula is used to calculate the expected rate of return of an asset.
ER = Sum ( Ri * Pi)
- Where ER is the expected rate of return
- Ri is the returns of each consecutive year
- Pi is the probability of those returns occurring on any given year.
What is the expected rate of return?
An expected rate of return is a percentage return on an asset any investor predicts will happen on average. That is if an investor buys a stock, they expect to see a certain return the next year on average. What the actual return is my vary, but on average it should be close to the expected rate of return.
How is the expected rate of return calculated?
The expected rate of return is calculated using the formula above. In short, it’s the sum of the average return rate and their probabilities over a given number of years. For example, let’s say there are 2 years we are analyzing. One year it returns 5%, at a 75% probability, and the next it earns 6% at a 80% probability. The expected return rate would be 5%*35% + 6% * 25% = .0325 = 3.25%.
Related Terms
| expected rate of return calculator |
| expected rate of return formula |
| how to calculate expected rate of return |
| expected return formula |
| how to calculate expected return |
| expected return calculator |
| expected return of portfolio |
| portfolio expected return calculator |
| expected return formula excel |
| how to calculate expected return of a stock |
| expected market return formula |
| portfolio expected return formula |
| how to find expected return |
| how to calculate expected return of a portfolio |
| expected return formula beta |
| how to calculate expected return of a stock from historical data |
| how to calculate expected market return |
| how to find expected rate of return |
| expected return excel |
| how to calculate expected return in excel |
| expected rate of return formula finance |
| calculate expected return on stock |
| estimated rate of return |
| expected return equation |
| expected rate of return in sip |
| how to find expected return on stock |
| how to find expected market return |
| how do you calculate expected return |
| expected return on stock formula |
| capm expected return formula |
| average rate of return expected on investments during retirement years |
| expected rate of return excel |
| expected return calculator beta |
| how to calculate expected return of portfolio |
| expected rate of return during retirement |
| how to find expected return of a portfolio |
| calculate expected returns for the individual stocks |
| expected rate of return on market portfolio |
| expected market return calculator |
| calculate the expected return for the two stocks |
| expected rate of return equation |
| expected return formula finance |
| how to calculate expected market return in capm model |
| calculate the expected return for stocks a and b |
| expected return of a stock formula |
| how to calculate expected return of a stock in excel |
| calculating expected return of a portfolio |
| formula of expected rate of return |
| how to calculate risk free rate with beta and expected return |
| expected return and standard deviation calculator |
| expected return portfolio calculator |
| how to find expected return on portfolio |
| calculate expected return in excel |
| how to calculate expected return of market |
| how to calculate expected return on investment |
| required rate of return formula capm |
| expected return on investment formula |
| how to find expected return of a stock |
| how to find expected return on market |
| expected return on assets formula |
| expected return formula in excel |
| expected rate of return on portfolio |
| expected return on investment calculator |
| how to find the expected return of a stock |
| expected return on market portfolio formula |
| how to calculate expected return on market |
| expected annual return formula |
| how to calculate expected return and standard deviation |
| how to find expected return in excel |
| how to calculate expected rate of return of a stock |
| how to compute expected return |
| how to calculate expected rate of return in excel |
| how to calculate expected return with beta |
| how to calculate stocks expected return |
| calculate the expected return for each stock |
| calculate risk free rate with beta and expected return |
| how to find the expected return |
| bond expected rate of return calculator |
| expected return of stock calculator |
| expected rate of return formula excel |
| how to calculate expected return on stock |
| formula for expected return of a portfolio |
| how to calculate market expected return |
| how to calculate expected return on the market |
| how do you calculate expected rate of return |
| how to find expected return of portfolio |
| how to calculate expected return without probability |
| bond expected rate of return formula |
| calculating expected return for a portfolio |
| how to calculate expected return using capm |
| calculate the stock’s expected return |
| expected rate of return calculator stock |
| how to calculate expected return of stock |
| portfolio expected return excel |
| expected dollar rate of return formula |
| expected rate of return of portfolio |
| how to calculate expected rate of return on financial calculator |
| expected return formula stock |
| how to find the rate of return on a stock |
| how to find the expected return of a portfolio |
| capm expected return calculator |
| expected rate of return of a portfolio |
| calculation of expected rate of return |
| estimated stock market returns |
| how to calculate expected return on excel |
| how to calculate expected return on a stock |
| calculate the expected return for stock a |
| stock expected rate of return calculator |
| how to calculate a stock’s expected return |
| find risk free rate with beta and expected return |
| sip expected rate of return |
