In
securities, the amount of
revenue an
investment generates over a given period of time as a percentage of the amount of
capital invested. The rate of return shows the amount of time it will take to recover one's
investment. For example, if one invests $1,000 and receives $150 in the first year of the investment, the rate of return is 15%, and the
investor will recover his/her initial $1,000 in six years and eight months. Different investors have different
required rates of return at different levels of
risk.