Expected rate of return A =10%+2 * (14%-10%) =18%.

The expected rate of return of B =10%+1* (14%-10%) =14%.

Expected rate of return c =10%+0.5 (14%-10%) =12%.

The expected rate of return of this portfolio = 60% *18%+30% *14%+10% *12% =16.2%.

Expected income, also known as expected income, refers to the income that can be predicted according to known information without unexpected events. Usually the future return on assets is uncertain. Uncertain returns can be expressed by various possible values and their corresponding probabilities. The weighted average of the two, that is, the mathematical expectation, is the expected return of assets. Let's take a quiz before studying. Click to test whether I am suitable for accounting.

In investment and financial management, the importance of expected return cannot be overemphasized. It is the key to investment decision-making, and the calculation of input variables. Without evaluating it, any trading decision or portfolio is impossible. It is not only important for investors, but also important for company managers, because the expected return of the company's stock is the main factor affecting the company's capital cost, which is related to what kind of investment projects the company chooses in the future.

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