Expected Return Calculator

About this calculator

Expected return is the probability-weighted average of an investment’s possible outcomes — for each scenario, the potential return is multiplied by the probability of that scenario happening, and the results are summed. It is the same expected-value concept used throughout decision theory and portfolio analysis to compare investments that carry different risk profiles.

Because it’s a weighted average, expected return does not tell you what will actually happen, only what the outcome would average out to if the scenario were repeated many times — a wide spread between the best and worst scenario returns can produce the same expected return as a narrow one. This calculator takes the return and probability for three scenarios and sums their weighted contributions to find the expected return.