3.1a Simple Return

Simple Return

Simple return is the percentage change in an investment’s value without compounding or additional contributions. The net simple return is simply (no pun intended) given as
$R_{t+1}=\frac{V_{t+1}}{V_t}-1,$
where $V_t$ is the asset’s valuation at time $t$. Then, the gross simple return is equal to $1+R_{t+1}$ and represents the revenue multiplier from time $t$ to $t+1$.

Examples

Portfolio Return