No investment has one future; it has a fan of possible futures, each with a probability. A stock might fall 10 percent in a recession (25 percent chance), gain 8 percent in a normal year (50 percent), or jump 20 percent in a boom (25 percent). The expected return -- each outcome weighted by its probability and summed -- compresses that fan into the single number decision-makers need: 7 percent here. But the number alone hides the risk, which is why this calculator also reports variance and standard deviation.

Enter your three scenarios' probabilities and returns. The tool checks that the probabilities total 100 percent, computes the probability-weighted expected return, then measures the spread: variance averages the squared deviations from the expectation, and standard deviation -- its square root -- restates the risk in the same percentage units as the return. A 7 percent expected return with a 12 percent standard deviation tells a very different story than the same 7 percent with a 3 percent deviation.

Analysts use this trio everywhere: pricing stocks, sizing positions, and building portfolios where imperfectly correlated assets cancel each other's wobbles. Your probabilities are subjective -- be honest about the bad scenario rather than rounding it to zero, because the expected return is only as truthful as the pessimism you let into it.

With the pre-filled defaults — Probability - Scenario 1 25%, Return - Scenario 1 -10%, Probability - Scenario 2 50%, Return - Scenario 2 8%, Probability - Scenario 3 25%, Return - Scenario 3 20% — the Expected Return Calculator returns Total Probability 100.0%, Expected Return 6.50%, Variance 114.7500, Standard Deviation 10.71%. Change any input and those results update instantly, so you can see exactly how each number you enter moves the answer.