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The geometric average return is equivalent to the cumulative return over the whole n periods, converted into a rate of return per period. Where the individual sub-periods are each equal (say, 1 year), and there is reinvestment of returns, the annualized cumulative return is the geometric average rate of return.
The accounting rate of return, also known as average rate of return, or ARR, is a financial ratio used in capital budgeting. [1] The ratio does not take into account the concept of time value of money. ARR calculates the return, generated from net income of the proposed capital investment. The ARR is a percentage return.
The rate of return on a portfolio can be calculated indirectly as the weighted average rate of return on the various assets within the portfolio. [3] The weights are proportional to the value of the assets within the portfolio, to take into account what portion of the portfolio each individual return represents in calculating the contribution of that asset to the return on the portfolio.
Energy return on energy invested; Internal rate of return; Marketing plan; Price–earnings ratio; Rate of profit; Rate of return (RoR), also known as 'rate of profit' or sometimes just 'return', is the ratio of money gained or lost (whether realized or unrealized) on an investment relative to the amount of money invested; Return on assets (RoA)
Let P t be the price of a security at time t, including any cash dividends or interest, and let P t − 1 be its price at t − 1. Let RS t be the simple rate of return on the security from t − 1 to t.
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Return and rate of return are sometimes treated as interchangeable terms, but the return calculated by a method such as the time-weighted method is the holding period return per dollar (or per some other unit of currency), not per year (or other unit of time), unless the holding period happens to be one year. Annualization, which means ...
Like the modified Dietz method, the simple Dietz method is based on the assumption of a simple rate of return principle, unlike the internal rate of return method, which applies a compounding principle. Also like the modified Dietz method, it is a money-weighted returns method (as opposed to a time-weighted returns method).