So since were talking about investments - its return nga imong madawat and at the same time, ang

possible risk nga imohang maincur in receving your the return sa imohang investment.

So lets start off first with the Expected rate of return. To understand clearly about the expected rate of
return, let me present to you an example.

Lets say naa kay 100 pesos- kanang 100 pesos nga excess cash, you either earned it from your income or
sa imohang savings. Youbdecided nga iinvest through putting your money in a bank, institutions____,
lets say kaning ecamples nasa book kaning company blahblah & company blahblahh.

Hello, Good Morning. Since in this chapter, we are talking about investments where investments are
always made with an expectation of getting something in return and at the same time, it also constitute
risks in receiving our return. Like for example, nidecide ka nga iinvest nimo ang 100 pesos through
buying stocks sa companies then isell nimo balik ang stock

Letss not focus on the risk kay ireport na siya sa next reporter, let's deal with the return of the
investment- ang kwarta nga atoang possible, karon in receiving our return, ang value nga atong
mreceive is actually uncertain - is the return going to be a profit or a loss para sa atoa? Nganong
uncertain man? its because due to the changes in different factors or conditions nga makaapekto
especially sa economy or sa company's behaviour man. So para makaweigh in ta gamay sa probabilities
kung pila atong madawat even though di gyud ta sure kung pila atong madawat in the future, at least
mao ni atoang iexpect despite sa conditions so we can do that by calculating our Expected Value

like for example, kanang state sa economy - commonlu known whether boom, normal og recession.
When we say boom, increasing sa commercial activity, tas ang sales, so meaning dako ang income, dako
pud ilang mahatag sa ilang investors, normal- moderate lang ang sales behaviour nila,sakto lang, pero
ang madawat nga return is sakto ra pud, di siya taas kayo, di pud ubos kaayo, then ang rescession- is in
opposite sa boom, kung kini increasing sales growth, kini siya low ang sales growth, gamay ang income,
so ang resulta gamay ilang mahatag sa investor so lesser siya sa imong giinvest.

Expected Value it refers to the rate of return expected to be realized from an investment; it is the mean
value, or average value of the probability distribution of possible results. So there are actually two ka
factors to calculate our through__________ &__________.

To calculate, we can use this formula of expected value or expected rate of return. In which it can
denoted as r-hat- r meaning return ang hat meaning uncertainty so sum up, uncertain ang value sa
imong return, next

So inorder to understand clearly about the expected value, we can actually interpret it through graph. It
can either be discrete og continuous - so first kay ang discrete- when we say discrete meaning (READ
THE MEANING) so magplot out raka gamit ang range of possibilitieslike diri ra jud ka kutob ani nga
boundaries so ang possibilities naa ra ani in between. Compare to continuous probability distribution- it
means (READD) so unlimited,