expected return

expected return
The expected return on a risky asset, given a probability distribution for the possible rates of return ( rate of return). Expected return equals some risk-free rate (generally the prevailing U.S. Treasury note or bond rate ) plus a risk premium (the difference between the historic market return, based upon a well diversified index such as the S&P 500 and the historic U.S. Treasury bond) multiplied by the asset's beta. The conditional expected return varies through time as a function of current market information. Bloomberg Financial Dictionary

Financial and business terms. 2012.

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  • Expected return — The expected return is the weighted average most likely outcome in gambling, probability theory, economics or finance.Discrete scenariosIn gambling and probability theory, there is usually a discrete set of possible outcomes. In this case,… …   Wikipedia

  • Expected Return — The average of a probability distribution of possible returns, calculated by using the following formula: How do you calculate the average of a probability distribution? As denoted by the above formula, simply take the probability of each… …   Investment dictionary

  • Expected return — The return expected on a risky asset based on a probability distribution for the possible rates of return. Expected return equals some risk free rate (generally the prevailing U.S. Treasury note or bond rate) plus a risk premium (the difference… …   Financial and business terms

  • expected return — profit that an investment is expected to make …   English contemporary dictionary

  • Expected return on investment — The return one can expect to earn on an investment. See: capital asset pricing model. The New York Times Financial Glossary …   Financial and business terms

  • expected return on investment — The return one can expect to earn on an investment. Bloomberg Financial Dictionary See: capital asset pricing model. Bloomberg Financial Dictionary …   Financial and business terms

  • expected return — The total amount or the estimated amount to be received under an annuity contract. IRC § 72(c) (2) …   Ballentine's law dictionary

  • Expected return-beta relationship — Implication of the CAPM that security risk premiums will be proportional to beta. The New York Times Financial Glossary …   Financial and business terms

  • expected return-beta relationship — Implication of the CAPM that security risk premiums will be proportional to beta. Bloomberg Financial Dictionary …   Financial and business terms

  • Expected shortfall — (ES) is a risk measure, a concept used in finance (and more specifically in the field of financial risk measurement) to evaluate the market risk or credit risk of a portfolio. It is an alternative to value at risk that is more sensitive to the… …   Wikipedia

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