Understanding the Approximate Expected Return Equation The formula for the approximate expected return of an investment can look intimidating, but it's really just a function of three things: (1) average annual current income, (2) average capital gains, and (3) the average value of the investment. Based on the information in the table, compute each of these yalues for the two stocks over a 3-year period and enter the values into the bottom half of the table. Text, derive the correct formula for approximate expected return by correctly arranging these three variables in the equation that follows. Approximate Expected Retura = Using this formuta, you can see that the approximate expected return for stock 1 is and the approximate expected return for Stock 2 is True or Faise: For these inyestments to be equally attractive, Stock 1 must camy lower risk than 5 . 2 . 2. Trise False and the approximate expected return for 5 tock 2 is True or False: For these investments to b0 equally attractive, Stock 1 must camy lower risk than Stock: 2 . True Fa'se