What is the expected return on investment?

The expected return on investment refers to the anticipated gain or profit that an investor can expect from a particular investment over a specified period of time. It is calculated by analyzing various factors such as historical performance, market trends, economic conditions, and the specific nature of the investment itself. Expected returns serve as a guide for investors to assess the potential profitability of an investment and make informed decisions. Higher expected returns usually come with higher risks, as there is no guarantee that the actual returns will match the expected returns. Investors typically use this metric to evaluate and compare different investment opportunities, aiming to maximize their profits while managing risks effectively.

This mind map was published on 26 January 2024 and has been viewed 32 times.