##### Rate of Return formula for any asset

The actual profit or loss is measured through the returns achieved from particular investments. Let the investment be in Risky securities ( Stocks, Gold, Oil, commodities , ETF, etc..,) or Risk free securities ( Bonds, fixed deposits, etc..,) . The above shown formula is used to understand the level or rate of return achieved. Positive RR shows there is a profit and negative RR refers to a loss.

**Example:**

Lets assume, Sulthan bought 10 shares of company A @ Rs100 per share on 28.10.2016. On 1.11.2016 the share price of company increase to Rs106. In this example P_{0} is 100 and P_{1 }is 106. Substituting this in the above RR formula we get RR is 0.06 . When multiplied by 100 we get 6 which means Sulthan earns 6% profit from his investment.

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