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20 February, 09:21

What are the roles of actual returns and expected returns in investment planning?

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  1. 20 February, 09:50
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    Answer:Actual returns is the actual gain or loss an investor gets on an investment while Expected return is the return an investor is expected to get on an investment which can be positive or negative.

    Explanation: Actual returns is the return an investor actually receives on his investment which can affects its net worth positively or negatively. It can be referred to as the internal rate of return on an investment.

    Expected return is also known as anticipated rate of return. It is not certain but it is an expectation. It can be calculated as the expected value of an investment. It is used to calculate the viability of an investment. It is historical in nature and therefore it does not have a guaranteed outcome.
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