Uncertainty of
Expected Return
Fair Price
Uncertainty
Unfair Price
IFA
100
Expected Return for the Buyer
& Cost of Capital for the Seller
Forecasted Monthly Return
{{avgReturn}}%
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Good
News
and
Forecasts
Bad
News
and
Forecasts
Millions of
Willing
Sellers
Millions of
Willing
Buyers
IFA Index Portfolio {{portfolio}}
{{dataRange}}
Average Monthly Return:
Standard Deviation:
Growth of $1:
{{avgReturn}}%
{{stdDeviation}}%
${{growthOfDollar}}
IFA Index Portfolios
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100
Expected Value:
Expected value is a key concept in economics, finance, and many other subjects.
In probability theory, the expected value of a random variable is the long-run average value of
repetitions of the experiment it represents. For example, the expected value in rolling a six-sided
dice is 3.5, because the average of all the numbers that come up in an extremely large number of
rolls is close to 3.5. Less roughly, the law of large numbers states that the arithmetic mean of
the values almost surely converges to the expected value as the number of repetitions approaches
infinity. The expected value is a key aspect of how one characterizes a probability distribution.
By contrast, the variance is a measure of dispersion of the possible values of the random variable
around the expected value. The variance itself is defined in terms of two expectations: it is the
expected value of the squared deviation of the variable's value from the variable's expected value.
In decision theory, and in particular in choice under uncertainty, an agent is described as making an
optimal choice in the context of incomplete information. For risk neutral agents, the choice involves
using the expected values of uncertain quantities, while for risk averse agents it involves maximizing
the expected value of some objective function such as a von Neumann–Morgenstern utility function.
Source: Wikipedia: Expected Value
Cost of Capital:
In economics and accounting, the cost of capital is the cost of a company's funds
(both debt and equity), or, from an investor's point of view "the required rate of return on a
portfolio company's existing securities".
Source: Wikipedia: Cost of Capital
IFA Index Portfolio {{portfolio}}
{{dataRange}}
Average Monthly Return:
Standard Deviation:
Growth of $1:
{{avgReturn}}%
{{stdDeviation}}%
${{growthOfDollar}}