9 lines
457 B
Markdown
9 lines
457 B
Markdown
# Expected Return
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Expected return (ER) is calculated by multiplying potential cashflow outcomes by the odds that they occur and then summing over the result.
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> ER = (return A x probability A) + (return B x probability B) + ...
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## References
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1. Grinold, Richard C., and Ronald N. Kahn. Active portfolio management: Quantitative theory and applications. Probus, 1995.
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1. Wilmott, Paul. Paul Wilmott introduces quantitative finance. John Wiley & Sons, 2007.
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