nominal return

Nominal Return

The rate of return on an investment without adjusting for inflation. It is calculated simply by taking the dollar amount of the return and comparing it to the amount invested. A high nominal return does not guarantee a real profit. For example, if the nominal return on an investment is 7% and the inflation rate is 4%, the real rate of return is only 3%.

nominal return

The rate of return on an investment without adjustment for inflation. While nominal return is useful in comparing the returns from different investments, it can be a very misleading indication of true investor earnings on an investment. Compare real return.
References in periodicals archive ?
The formula for converting the nominal return into effective annual rate is:-
Inasmuch as the co-movement of nominal stock returns and nominal interest rates could be due to changes in expected inflation, the hypothesis is tested using real as well as nominal return data.
To put the matter another way, nearly all ordinary investors are now being progressively impoverished because the nominal return on their investments is too small to compensate for the loss of the dollar's purchasing power during the term of the investment.
Bodie (1976) worked on Fisher Hypothesis and found that actual nominal return depends on expected and unexpected inflation rates and also it depends on expected and unexpected nominal returns.
If investors," Custard says, "demand a real return of 2% and inflation is 2% they need a nominal return of 4%.
Over the past two decades, investing one's entire portfolio in farmland would have yielded the greatest nominal return, equivalent to compound annual growth of 10.
The bank said that it will target institutional and wealthy clients with the bond offering, which offers a nominal return of 4.
However, year-to-date, the region has posted a nominal return of 0.
Abraham Sedore was mentioned on a Nominal Return of the Officers and Privates of the Flank Companies of the 1st Regimental Lennox Militia who were out of service in the year 1812.
The nominal return based evidence so far does not provide support to Cox and Peterson (1994), Park (1995), Pritamani and Singal (2001), and Larson and Madura (2003) where some continuation is found after a negative return.
The rate is linked to the nominal return on government gilts, and is not a variable rate moving in line with base rate.
Using this strategy we find that Zimbabwe's stock market had the greatest nominal return while Kenya's had the lowest return; Botswana's stock market had the best inflation-adjusted return while the stock market of Kenya had the worst return; and Zimbabwe's stock market had the best U.