




The rate of return is the percentage gain or loss of an investment over a period of time. Rate of return is often expressed as an annual percentage; for example, an annual rate of return of 5 percent means the investment gained 5 percent over a twelve month period.
The rate of return is based on the change in value of the underlying asset, adjusted for payouts. A bond, for example, has a rate of return equal to the total interest paid by the bond adjusted for changes in price of the bond itself. The rate of return of a stock is the change in price adjusted for any dividends. With mutual funds and other pooled investments, the rate of return must also account for any capital distributions.
Rate this rate of return definition...




Where is the market headed? The answer may surprise you. Find out with the exclusive & Barron's recommended charts of Chart of the Day. 

Popular Terms: 1035 exchange, phantom income, command economy, diluted share, LIBOR, per diem, exdividend date, debt service coverage, cancelled check, Zero Cost Collar, dividends payable, implied volatility, 1031 exchange, labor relations, 144a, covered put, irrevocable trust, class C shares, quality assurance, liquidity ratio, annual return, deferred tax, margin rate, reverse mortgage, deferred revenue, inflation, stock market close, limit order, retained earnings, VIX, current ratio, FTSE, Key Rate Duration, balance sheet, APR, required rate of return, stock split, FICO score, 401a, minority interest, open position, real GDP, option premium, whollyowned subsidiary, risk management, exdividend, in escrow, average price per share, EBITDA


 