Real rate of return(redirected from Inflation Adjusted Rates of Return)
Real rate of return
Real Rate of Return
Real rate of return.
You find the real rate of return on an investment by subtracting the rate of inflation from the nominal, or named, rate of return.
For example, if you have a return of 6% on a bond in a period when inflation is averaging 2%, your real rate of return is 4%. But if inflation were 4%, your real rate of return would be only 2%.
Finding real rate of return is generally a calculation you have to do on your own. It isn't provided in annual reports, prospectuses, or other publications that report investment performance.