Question

The distinction between Interest rates and rate of returns is

that ________ are defined as the payments to the owner plus the
change in a security's value expressed as a fraction of the
security's pur

Answer 1

The distinction between interest rates and rate of returns is that interest rates are defined as the payments to the owner of a security, typically expressed as a percentage of the principal amount invested. On the other hand, the rate of return encompasses both the interest payments received and the change in the value of the security over a specific period, expressed as a fraction or percentage of the initial investment. The rate of return provides a comprehensive measure of the overall performance or profitability of an investment, considering both income and capital gains or losses.