Rate Of Return


DEFINITION of 'Rate Of Return'

The gain or loss on an investment over a specified period, expressed as a percentage increase over the initial investment cost. Gains on investments are considered to be any income received from the security plus realized capital gains.


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BREAKING DOWN 'Rate Of Return'

A rate of return measurement can be used to measure virtually any investment vehicle, from real estate to bonds and stocks to fine art, provided the asset is purchased at one point in time and then produces cash flow at some time in the future. Financial securities are commonly judged based on their past rates of return, which can be compared against assets of the same type to determine which investments are the most attractive.

  1. Compound Net Annual Rate - CNAR

    The return on an investment after taking tax implications into ...
  2. Pretax Rate Of Return

    The rate of return on an investment that does not take the taxes ...
  3. Nominal Rate Of Return

    The amount of money generated by an investment before expenses ...
  4. Expected Return

    The amount one would anticipate receiving on an investment that ...
  5. Actual Return

    The actual gain or loss of an investor. This can be expressed ...
  6. Abnormal Return

    A term used to describe the returns generated by a given security ...
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