Annual Return
What is Annual Return? The annual return is the return on an investment generated over a year and calculated as a percentage of the initial amount of investment. If the return is positive (negative), it is considered a gain (loss) on the initial investment. The rate of return will vary depending on the level of...
Nominal Rate of Return
What is the Nominal Rate of Return? The nominal rate of return is the total rate of return earned on an investment before adjusting for any deductions and premiums, such as investment fees, trading costs, tax expenses, and inflation. It can be considered the “face” amount of a return. Formula for the Nominal Rate of...
Nominal Value
What is Nominal Value? Nominal value is a common financial term that is used in various contexts within finance. For stocks and bonds, it is also referred to as the “face value” of an investment that is stated on the front of a security. It is in contrast to the market value of a security....
Nominal Yield
What is Nominal Yield? Nominal yield is a fixed percentage amount calculated for fixed income securities representing a stated yield for a bond. It is calculated by dividing the annual interest payments by the face value of the bond. It is also referred to as the coupon rate of a fixed income security. How to...
Arbitrageur
What is an Arbitrageur? An arbitrageur is an individual who earns profits by taking advantage of inefficiencies in financial markets. Arbitrage opportunities arise when an asset is priced differently between multiple markets at the same time. Such price differences are inefficiencies resulting from deficiencies in the marketplace. A successful arbitrageur profits by simultaneously purchasing financial...
