Question

what is the definition of expected return? multiple choice question. it is the expected variation in return on a risky asset. it is the return that an investor expects to earn on a risky asset in the future. it is the variation in return during the last period. it is the return that was earned in the past on a risky asset.

Answer 1

the definition of expected return is it is the return that an investor expects to earn on a risky asset in the future.

The expected return is the profit or loss an investor might expect to realize from a certain investment. Prior to aggregating the findings, potential outcomes are multiplied by their likelihood to determine the expected return.

The expected return is a key financial concept that investors use to inform their choices. By estimating the expected return of a specific investment or portfolio, you may forecast the profit or loss on an investment based on its past performance.

More irregular investments can be expected to yield higher returns. A larger standard deviation indicates a riskier and more variable investment. As a result, the expected return should also be larger.

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