ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -A rate of return (RoR) is the net gain or loss of an investment over a specified time period, expressed as a percentage of the investment’s initial cost.

Detailed explanation-2: -A Rate of Return (ROR) is the gain or loss of an investment over a certain period of time. In other words, the rate of return is the gain (or loss) compared to the cost of an initial investment, typically expressed in the form of a percentage.

Detailed explanation-3: -Understanding Total Return Total return is expressed as a percentage of the amount invested. For example, a total return of 20% means the security increased by 20% of its original value due to a price increase, distribution of dividends (if a stock), coupons (if a bond), or capital gains (if a fund).

Detailed explanation-4: -The most common is net income divided by the total cost of the investment, or ROI = Net income / Cost of investment x 100.

Detailed explanation-5: -Return on investment (ROI) is a performance measure used to evaluate the efficiency or profitability of an investment or compare the efficiency of a number of different investments. ROI tries to directly measure the amount of return on a particular investment, relative to the investment’s cost.