An investment’s “expected return” is a critical number, but in theory it is fairly simple: It is the total amount of money you can expect to gain or lose on an investment with a predictable rate of ...

One simple but powerful method investors can use to assess the risk and reward of a stock portfolio is using the Capital Asset Pricing Model, or CAPM, model for expected returns. The basics of CAPM ...

Both organizations and private individuals invest their resources in order to earn profits on their investments. Profitability can be measured using either income or the rate of return. Income is the ...

Every investment involves a possible gain and a possible loss. The risk/reward ratio compares how much you could lose to how ...

In order to make an educated decision when making any investment, you need to try to determine how much you could make on that investment. It’s also important to know how much you’ve made on the ...

Daniel Jassy, CFA, is an Investopedia Academy instructor and the founder of SPYderCRusher Research. He contributes to Excel and Algorithmic Trading. Yarilet Perez is an experienced multimedia ...

Master calculating cost of equity in Excel using CAPM. Discover step-by-step guidance on market return, risk-free rate, and ...

Stock's historical variance measures its return stability over time. Higher variance indicates greater return unpredictability and risk. Calculate variance using Excel to simplify the process for ...