ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Rate of Return The expected rate of return on an asset equals the market interest rate; Present Value The asset price equals the present value of expected future payments.

Detailed explanation-2: -Return on investment (ROI) is calculated by dividing the profit earned on an investment by the cost of that investment. For instance, an investment with a profit of $100 and a cost of $100 would have an ROI of 1, or 100% when expressed as a percentage.

Detailed explanation-3: -The interest rate is the amount a lender charges a borrower and is a percentage of the principal-the amount loaned. The interest rate on a loan is typically noted on an annual basis known as the annual percentage rate (APR).

Detailed explanation-4: -A mean return (also known as expected return) is the estimated profit or loss an investor expects to achieve from a portfolio of investments. It can also refer to monthly stock returns or the mean value of the probability distribution of possible returns.