What is the expected rate of return on an investment and what does it tell us about the probability of the risk involved with a particular investment?
Expert Answer
Expected Rate of return on investment
Expected returns is the amount of profit or loss the investor expects from the investment. The return expected is calculated on rates which are based on previous years data and such rates are known as rates of return.
The return is not guaranteed it is estimated based on historical data.
The returns on particular investment increases which increase in the risk. Which means the investor gets low
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