The percentage change in the investor's wealth from the beginning to the end of the year is known as the

A) retention ratio
B) payout ratio
C) rate of return
D) discount rate

Question

The percentage change in the investor's wealth from the beginning to the end of the year is known as the

A) retention ratio
B) payout ratio
C) rate of return
D) discount rate

Quizplus · Accepted Answer

The percentage change in the investor's wealth from the beginning to the end of the year is known as the rate of return. This measures the profitability of an investment and is typically expressed as a percentage of the initial investment. The retention ratio refers to the proportion of earnings that a company retains rather than paying out as dividends, while the payout ratio is the percentage of a company's earnings that are paid out as dividends to shareholders. The discount rate is the rate of return used to determine the present value of future cash flows.

The Percentage Change in the Investor's Wealth from the Beginning