Arithmetic Average Rate of Return

Arithmetic Average Rate of Return

The rate of return on an investment that is calculated by taking the total cash inflow over the life of the investment and dividing it by the number of years in the life of the investment. The average rate of return does not guarantee that the cash inflows are the same in a given year; it simply guarantees that the return averages out to the average rate.
References in periodicals archive ?
RL1: Arithmetic average rate of return on the stock portfolio of the failed portfolio formation
RW2: Arithmetic average rate of return on the portfolio of stocks in the period after portfolio formation