As investors or traders, the main objective is to make a profit. Returns can be calculated for a holding period or on an annualised basis, and on a continuously compounded basis or a discrete basis. In this video, Abdulla will provide a formula for calculating returns on a discrete basis for both the holding period and an annual percentage return.

Overview

Calculating returns can be expressed as a percentage gain or loss on an investment. Investors main objective is to make a profit - a positive return on their investment. These returns can be calculated using the formulae outlined below.

Key learning objectives:

Describe the basic properties of calculating returns

Identify the relevant formulae for calculating holding period returns and annualised returns

Summary

Expert### Abdulla Javeri

Abdulla’s career in the financial markets started in 1990 when he entered the trading floor of the London International Financial Futures Exchange, LIFFE, and qualified as a pit trader in equity and equity index options. In 1996, Abdulla became a trainer for regulatory qualifications and then for non-exam courses, primarily covering all major financial products.

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