Expected Returns

Expected return is an estimate of the profit or loss an investor might anticipate from an investment over a certain period, based on the possible outcomes and their probabilities. It combines all potential scenarios, weighing each by how likely it is to happen. For example, if an investment has a 50% chance to gain $100 and a 50% chance to lose $50, the expected return considers both outcomes and their likelihood to provide a balanced estimate. It's a useful way to gauge potential profitability, though actual results can vary due to market fluctuations.