Business Finance Online

Expected Return Calculator: Introduction

The Expected Return Calculator calculates the Expected Return, Variance, Standard Deviation, Covariance, and Correlation Coefficient for a probability distribution of asset returns.

  1. Input Fields - Enter the Probability, Return on Stock 1, and Return on Stock2 for each state in these fields. The sum of the probabilities must equal 100%.
  2. Expected Return Fields - The Expected Returns on Stocks 1 and 2 are displayed here.
  3. Variance Fields - The Variance of the returns on Stocks 1 and 2 are displayed here.
  4. Standard Deviation Fields - The Standard Deviation of the returns on Stocks 1 and 2 are displayed here.
  5. Covariance Field - The Covariance between the returns on Stocks 1 and 2 is displayed here.
  6. Correlation Coefficient Field - The Correlation Coefficient between the returns on Stocks 1 and 2 is displayed here.
  7. Buttons - Press the Calculate Button to calculate the Expected Return, Variance, etc. for Assets 1 and 2. Press the Clear Button to reset the calculator.

Now you are ready to use the Expected Return Calculator.

 

© 2002 - 2010 by Mark A. Lane, Ph.D.