Rate of Return
Rate of return is a measure of the profitability of an investment. It is the ratio of the amount of money gained or lost on an investment relative to the amount of money invested. It is usually expressed as a percentage. The rate of return is used to measure the performance of an investment over a period of time. It is also used to compare the performance of different investments.
History of the Term
The concept of rate of return has been around since the early days of finance. It was first used by the ancient Greeks to measure the performance of their investments. The concept was later adopted by the Romans and then by the modern financial world. The rate of return has been used to measure the performance of investments for centuries.
In modern finance, the rate of return is used to measure the performance of investments over a period of time. It is used to compare the performance of different investments and to determine the profitability of an investment. It is also used to measure the risk associated with an investment.
Table of Comparisons
| Investment | Rate of Return |
|---|---|
| Stock Market | 7.5% |
| Bonds | 3.5% |
| Real Estate | 5.5% |
Summary
Rate of return is a measure of the profitability of an investment. It is the ratio of the amount of money gained or lost on an investment relative to the amount of money invested. It is used to measure the performance of an investment over a period of time and to compare the performance of different investments. For more information about rate of return, you can visit websites such as Investopedia, The Balance, and Investing.com.
See Also
- Return on Investment (ROI)
- Internal Rate of Return (IRR)
- Net Present Value (NPV)
- Capital Gains
- Dividend Yield
- Sharpe Ratio
- Beta
- Alpha
- Treynor Ratio
- Standard Deviation
