Section 2
Understanding Returns
Book
Version 3
By Boundless
By Boundless
Boundless Finance
Finance
by Boundless
5 concepts
![Thumbnail](../../../../../../figures.boundless-cdn.com/34504/square/wg8jvctwsaoqju85le91.jpg)
Reporting
When accounting for capital gains and losses in the securities market, understanding reporting responsibilities and potential reductions is critical.
![Thumbnail](../../../../../../figures.boundless-cdn.com/12377/square/picture-205.jpg)
Dollar Returns
The dollar return is the difference between the final value and the initial value in nominal terms.
![Thumbnail](../../../../../../figures.boundless-cdn.com/12379/square/picture-206.jpg)
Percentage Returns
Percentage returns show how much the value of the investment has changed in proportion to the size of the initial investment.
![Thumbnail](../../../../../../figures.boundless-cdn.com/12398/raw/al-graph-to-jan09-28log-29.jpg)
Historical Returns: Market Variability and Volatility
Markets and securities may follow general trends, but exogenous factors (such as macroeconomic changes) cause variability and volatility.
![Thumbnail](../../../../../../figures.boundless-cdn.com/9357/square/800px-irr1-grieger.jpeg)
Calculating and Understanding Average Returns
Average returns are commonly found using average ROI, CAGR, or IRR.