Week2 5009MBA

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? How could the required rate of return of an investment be estimated? In terms of risk, what are the advantages (and/or disadvantages) of a well-diversified portfolio? The expected rate of return on an investment according to Investopedia is the amount of profit or loss an investor anticipates on an investment that has various known or expected rate of return(). By multiplying potential outcomes by the chances of them occurring and summing the results up is how you calculated expected rate of return. It is usually based on historical data that is not guaranteed. It is used to determine if an investment has a...