Risk and Return Concepts Expected Return Measures of Risk Portfolio Risk and Return Diversification Capital Asset Pricing Model Risk and Return Equations Tools & Problems Expected Return Calculator Expected Return Exercise Expected Return Quiz Two Asset Portfolio Calculator Two Asset Portfolio Exercise Two Asset Portfolio Quiz CAPM Calculator CAPM Exercise CAPM Quiz

# 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.