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What is Rate Of Return (ROR)?
In finance, rate of return (ROR) is also known as return on investment (ROI), rate of profit or just return, is the ratio of money gained or lost (whether realized or unrealized) on an investment relative to the amount of money invested.
The gain or loss on an investment over a specified period, can be 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.
A rate of return measurement can be used to measure virtually any investment vehicle, from stocks to bonds to real estate to other financial instruments, 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 rate of returns, which can be compared against assets of the same type to determine which investments are the most attractive.
In finance, rate of return (ROR) is also known as return on investment (ROI), rate of profit or just return, is the ratio of money gained or lost (whether realized or unrealized) on an investment relative to the amount of money invested.
The gain or loss on an investment over a specified period, can be 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.
A rate of return measurement can be used to measure virtually any investment vehicle, from stocks to bonds to real estate to other financial instruments, 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 rate of returns, which can be compared against assets of the same type to determine which investments are the most attractive.