Classification of Return

abhishreshthaa

Abhijeet S
Returns can be classified as:


1.Realized return;

2. Expected return

Realized return (or ex-post) is the return that was realized or could have been realized from an asset whereas expected return is the return that an investor expects to earn over some time in future.


Expected return is affected by uncertainty.


For example: Sunil received Rs 1,100 from an investment of Rs 1,000 made a year ago. Hence his realized return is 10%.
 
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