What is expected return in investing?

Expected return is the weighted average of all possible returns, where each return is multiplied by its probability of occurrence. It gives an estimate of the average return you might expect from an investment over time, based on your assumptions.

How do I use the Expected Return Calculator?

Enter the possible return percentages for each scenario and their corresponding probabilities. The calculator multiplies each return by its probability and sums the results to give the expected return. Ensure probabilities sum to 100% for accurate results.

Can expected return predict actual investment performance?

No, expected return is a statistical estimate based on your inputs. Actual returns can vary significantly. It is a planning tool, not a guarantee of future performance.

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Expected Return Calculator.

Aug 4, 2026

Calculate probability-weighted expected return across scenarios.

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Set your values

Results update as you type.

02 / ANSWER

Scenario 1 probability

Scenario 1 return

Scenario 2 probability

Scenario 2 return

Expected return

Probability total

100%

FAQs

How does the expected return calculator work?

Enter the requested values to see a deterministic result. Assumptions are explicit and no live market or tax data is fetched.

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Cite this calculator

Canonical URL: https://mathify.one/en/finance/expected-return

Updated Aug 4, 2026

Cite as: Mathify. (2026). Expected Return Calculator. https://mathify.one/en/finance/expected-return

Use Cases

Portfolio Scenario Analysis

Evaluate different market conditions (bull, bear, stagnant) by assigning probabilities to each, helping you understand potential average outcomes.

Example: Assign 50% to 10% return, 30% to 5%, 20% to -5% to see expected return.

Investment Comparison

Compare expected returns of different investments by inputting your own probability estimates for each, aiding in decision-making.

Example: Compare a stable bond (low variance) vs. a volatile stock (high variance).

Frequently Asked Questions

What is expected return in investing?: Expected return is the weighted average of all possible returns, where each return is multiplied by its probability of occurrence. It gives an estimate of the average return you might expect from an investment over time, based on your assumptions.
How do I use the Expected Return Calculator?: Enter the possible return percentages for each scenario and their corresponding probabilities. The calculator multiplies each return by its probability and sums the results to give the expected return. Ensure probabilities sum to 100% for accurate results.
Can expected return predict actual investment performance?: No, expected return is a statistical estimate based on your inputs. Actual returns can vary significantly. It is a planning tool, not a guarantee of future performance.

Tips & Common Mistakes

Tips

Ensure your probabilities sum to 100% to get a valid expected return.
Use realistic probability estimates based on historical data or your own research.
Consider using multiple scenarios to capture a range of outcomes, not just best and worst cases.
Remember that expected return does not account for risk; use alongside other metrics like standard deviation.

Common Mistakes to Avoid

Forgetting to convert percentages to decimals when calculating manually, but the calculator handles it for you.
Entering probabilities that do not sum to 100%, leading to an incorrect weighted average.
Confusing expected return with guaranteed return; it is only an average estimate.

Last updated: August 13, 2026