Portfolio Expected Return Calculator

✖Asset Weight 1 refers to the proportion of the portfolio's total value that the asset represents.ⓘ Asset Weight 1 [w₁]			+10% -10%
✖Expected Return on Asset 1 is the anticipated return that an investor can expect to receive from holding that asset over a certain period.ⓘ Expected Return on Asset 1 [ER₁]			+10% -10%
✖Asset Weight 2 refers to the proportion of the portfolio's total value that the asset represents.ⓘ Asset Weight 2 [w₂]			+10% -10%
✖Expected Return on Asset 2 is the anticipated return that an investor can expect to receive from holding that asset over a certain period.ⓘ Expected Return on Asset 2 [ER₂]			+10% -10%

✖Portfolio Expected Return is the weighted average of the expected returns of the individual assets within the portfolio.ⓘ Portfolio Expected Return [ER_p]

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Formula

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Portfolio Expected Return

Formula

`"ER"_{"p"} = "w"_{"1"}*("ER"_{"1"})+"w"_{"2"}*("ER"_{"2"})`

Example

`"0.22"="0.4"*("0.25")+"0.6"*("0.20")`

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Portfolio Expected Return Solution

STEP 0: Pre-Calculation Summary

Formula Used

Portfolio Expected Return = Asset Weight 1*(Expected Return on Asset 1)+Asset Weight 2*(Expected Return on Asset 2)
ER_p = w₁*(ER₁)+w₂*(ER₂)
This formula uses 5 Variables

Variables Used

Portfolio Expected Return - Portfolio Expected Return is the weighted average of the expected returns of the individual assets within the portfolio.
Asset Weight 1 - Asset Weight 1 refers to the proportion of the portfolio's total value that the asset represents.
Expected Return on Asset 1 - Expected Return on Asset 1 is the anticipated return that an investor can expect to receive from holding that asset over a certain period.
Asset Weight 2 - Asset Weight 2 refers to the proportion of the portfolio's total value that the asset represents.
Expected Return on Asset 2 - Expected Return on Asset 2 is the anticipated return that an investor can expect to receive from holding that asset over a certain period.

STEP 1: Convert Input(s) to Base Unit

Asset Weight 1: 0.4 --> No Conversion Required
Expected Return on Asset 1: 0.25 --> No Conversion Required
Asset Weight 2: 0.6 --> No Conversion Required
Expected Return on Asset 2: 0.2 --> No Conversion Required

STEP 2: Evaluate Formula

Substituting Input Values in Formula

ER_p = w₁*(ER₁)+w₂*(ER₂) --> 0.4*(0.25)+0.6*(0.2)

Evaluating ... ...

ER_p = 0.22

STEP 3: Convert Result to Output's Unit

0.22 --> No Conversion Required

FINAL ANSWER

0.22 <-- Portfolio Expected Return

(Calculation completed in 00.004 seconds)

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Created by Vishnu K

BMS College of Engineering (BMSCE), Bangalore

Vishnu K has created this Calculator and 200+ more calculators!

Verified by Kashish Arora

Satyawati College (DU), New Delhi

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< 5 Investment Calculators

Equivalent Annual Annuity

Go Equivalent Annuity Cashflow = (Rate per Period*(Net Present Value (NPV)))/(1-(1+Rate per Period)^-Number of Periods)

Portfolio Expected Return

Go Portfolio Expected Return = Asset Weight 1*(Expected Return on Asset 1)+Asset Weight 2*(Expected Return on Asset 2)

Value at Risk

Go Value at Risk = -Mean of Profit and Loss+Standard Deviation of Profit and Loss*Standard Normal Variate

Average Return on Investment

Go Average Return = modulus(Total Value of Return)/Total Number of Returns

Portfolio Turnover Rate

Go Porfolio Turnover Rate = (Total Sales and Purchases of Shares/Average Net Assets)*100

Portfolio Expected Return Formula

Portfolio Expected Return = Asset Weight 1*(Expected Return on Asset 1)+Asset Weight 2*(Expected Return on Asset 2)
ER_p = w₁*(ER₁)+w₂*(ER₂)

What is Portfolio Expected Return?

The expected return of a portfolio is the weighted average of the expected returns of the individual assets in the portfolio. To calculate it, you multiply the expected return of each asset by its weight in the portfolio and sum up these values for all assets in the portfolio.
Where w1, w2 are the respective weights for the two assets, and E(R1), E(R2) are the respective expected returns.
Levels of variance translate directly with levels of risk; higher variance means higher levels of risk and vice versa. The variance of a portfolio is not just the weighted average of the variance of in

How to Calculate Portfolio Expected Return?

Portfolio Expected Return calculator uses Portfolio Expected Return = Asset Weight 1*(Expected Return on Asset 1)+Asset Weight 2*(Expected Return on Asset 2) to calculate the Portfolio Expected Return, The Portfolio Expected Return formula is defined as the weighted average of the expected returns of the individual assets in the portfolio. Portfolio Expected Return is denoted by ER_p symbol.

How to calculate Portfolio Expected Return using this online calculator? To use this online calculator for Portfolio Expected Return, enter Asset Weight 1 (w₁), Expected Return on Asset 1 (ER₁), Asset Weight 2 (w₂) & Expected Return on Asset 2 (ER₂) and hit the calculate button. Here is how the Portfolio Expected Return calculation can be explained with given input values -> 0.22 = 0.4*(0.25)+0.6*(0.2).

FAQ

What is Portfolio Expected Return?

The Portfolio Expected Return formula is defined as the weighted average of the expected returns of the individual assets in the portfolio and is represented as ER_p = w₁*(ER₁)+w₂*(ER₂) or Portfolio Expected Return = Asset Weight 1*(Expected Return on Asset 1)+Asset Weight 2*(Expected Return on Asset 2). Asset Weight 1 refers to the proportion of the portfolio's total value that the asset represents, Expected Return on Asset 1 is the anticipated return that an investor can expect to receive from holding that asset over a certain period, Asset Weight 2 refers to the proportion of the portfolio's total value that the asset represents & Expected Return on Asset 2 is the anticipated return that an investor can expect to receive from holding that asset over a certain period.

How to calculate Portfolio Expected Return?

The Portfolio Expected Return formula is defined as the weighted average of the expected returns of the individual assets in the portfolio is calculated using Portfolio Expected Return = Asset Weight 1*(Expected Return on Asset 1)+Asset Weight 2*(Expected Return on Asset 2). To calculate Portfolio Expected Return, you need Asset Weight 1 (w₁), Expected Return on Asset 1 (ER₁), Asset Weight 2 (w₂) & Expected Return on Asset 2 (ER₂). With our tool, you need to enter the respective value for Asset Weight 1, Expected Return on Asset 1, Asset Weight 2 & Expected Return on Asset 2 and hit the calculate button. You can also select the units (if any) for Input(s) and the Output as well.

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