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    Probability & Expected Return

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    How is the probability and expected return calculated on a single stock?

    © BrainMass Inc. brainmass.com June 3, 2020, 6:56 pm ad1c9bdddf

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    Please see the details as below.

    Expected return is the mean (average) of the probability distribution of the returns. There are various methods to calculate the expected return. Let us look at the following example.

    Returns from a stock (%) Probability
    10 0.1
    13 ...

    Solution Summary

    solution describes how to calculate probability and expected return on a single stock.