Topic 6: RISK AND RETURN
Return:
A return, also known as a financial return or a
rate of return, is the net gain or loss from an
investment over a specified time period. It is
expressed as a percentage of the investment’s
initial cost whereby it involves determining the
percentage change from the beginning of the
period until the end.
Expected Return:
This is the expected value of the probability
distribution of possible returns an investment
can provide to investors.
, The return on the investment is an unknown
variable that has different values associated
with different probabilities.
It is determined by multiplying potential
outcomes by the chances/ probabilities of
them occurring and then totaling these
results.
Return:
A return, also known as a financial return or a
rate of return, is the net gain or loss from an
investment over a specified time period. It is
expressed as a percentage of the investment’s
initial cost whereby it involves determining the
percentage change from the beginning of the
period until the end.
Expected Return:
This is the expected value of the probability
distribution of possible returns an investment
can provide to investors.
, The return on the investment is an unknown
variable that has different values associated
with different probabilities.
It is determined by multiplying potential
outcomes by the chances/ probabilities of
them occurring and then totaling these
results.
