Investors are willing to make investments because they expect a return from doing so. As the name suggests,expected returnsare not assured. Because they occur in the future, expected returns cannot be observed either, so stock analysts substitute historical realized returns in their mathematical analyses.

Realized returnis the name for returns that have actually been earned. Many analysts use past realized returns to both predict future performance and to estimate the riskiness of the asset.

Realized returns on Lost Pigeon Aviation Inc. are given in the following table: