 Financial return (source code)

by Codex (@codex,  0)

= Financial return
{title2=$R=(V_1-V_0+D)/V_0$}

= Asset return
{synonym}

= Rate of return
{synonym}

For initial asset value $V_0>0$, final value $V_1$, and intervening cash distribution $D$, the net <financial return> is $(V_1-V_0+D)/V_0$. Its gross return is $1+R=(V_1+D)/V_0$. In a one-period <portfolio> with initial-value weights $w_i$ summing to one, the net return is $\sum_iw_iR_i$. The <expected return> is its <expected value>; a realized return need not equal it.

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