Realized rate of return意思

"Realized rate of return" refers to the actual return that an investment or portfolio has generated over a specific period of time after all the gains and losses have been realized, i.e., after the investments have been sold and the profits or losses have been realized. This is in contrast to the "expected" or "projected" rate of return, which is an estimate of the return that an investment might generate in the future based on historical data, market analysis, or other predictive methods.

The realized rate of return is calculated by taking the total income and capital gains from the investment over a period of time and dividing it by the initial investment. This figure is then expressed as a percentage. For example, if an investment was made with $10,000 and at the end of the year, it was sold for $11,000, the realized rate of return would be ($11,000 - $10,000) / $10,000 = 0.1 or 10%.

Realized rate of return is an important metric for investors because it reflects the actual performance of an investment, rather than just the potential performance. It is often used to evaluate the performance of a portfolio or to make decisions about future investments.