expected return

Definition

Estimation of the value of an investment, including the change in price and any payments ordividends, calculated from a probability distribution curve of all possible rates of return. In general, if an asset is risky, the expected return will be the risk-free rate of return plus a certain risk premium. also called expected value.

Use expected return in a sentence

You should try to figure out what your expected return will be so you know if it is worth your time.

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Since he was a venture capitalist, he was always concerned about the expected return on his investment. He had to make sure it was worth his investment.

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The broker at Fidelity advised John Smith to invest his lottery winnings in solar energy because the expected return in this type of investment was growing rapidly.

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