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Historical return definition

We go to great lengths to simplify and standardize terminology because deciphering the language of Finance can be the greatest challenge for beginners.


Historical return is the rate of return on an asset, like a stock, bond or fund, over a period of time that occurred in the past. There are several ways to calculate return, the non-compounding version called arithmetic, and the compounding version called geometric, but the key here is to make the destinction between past (historical), present (expected) and future (forecast) for security valuation.

Synonym: realized return

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Historical returns are the primary input for determining market-expected returns. | True or False?

True. A regression using returns derives an asset's beta which is used to generate expected return.

In a Sentence

Liz:  It is now company policy to use the terms: historical return , expected and forecast.
Kim:  Finally! Terms in Finance duplicate like stagflation.


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historical return
realized return
Capital Asset Pricing Model
past return