Rate of Return

Definition

Rate of return is the gain or loss on an investment relative to the amount invested, expressed as a percentage. It measures the profitability of an investment over a specific period.

Related terms

Risk: The possibility of losing some or all of the investment's value due to various factors such as market fluctuations or economic conditions.

Compound Interest: Interest earned on both the initial investment and any previously earned interest.

Dividends: Payments made by a corporation to its shareholders from its profits as a distribution of earnings.