since different securities have different initial prices, different dividend rat
ID: 2635793 • Letter: S
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since different securities have different initial prices, different dividend rates, and different final sale prices, in order to compare such securities as investments, investors have to since different securities have different initial prices, different dividend rates, and different final sale prices, in order to compare such securities as investments, investors have to since different securities have different initial prices, different dividend rates, and different final sale prices, in order to compare such securities as investments, investors have toExplanation / Answer
since different securities have different initial prices, different dividend rates, and different final sale prices, in order to compare such securities as investments, investors have to
Evaluate Performance
Choosing investments is just the beginning of your work as an investor. As time goes by, you'll need to monitor the performance of these investments to see how they are working together in your portfolio to help you progress toward your goals. Generally speaking, progress means that your portfolio value is steadily increasing, even though one or more of your investments may have lost value.
To assess how well your investments are doing, you'll need to consider several different ways of measuring performance.
Yield
Yield, which is typically expressed as a percentage, is a measure of the income an investment pays during a specific period, typically a year, divided by the investment's price. All bonds have yields, as do dividend-paying stocks, most mutual funds, and bank accounts including certificates of deposit (CDs).
Yields on Bonds
When you buy a bond at issue, its yield is the same as its interest rate or coupon rate. The rate is figured by dividing the yearly interest payments by the par value, usually $1,000. So if you're collecting $50 in interest on a $1,000 bond, the yield is 5%.
Yields on Other Investments
If your assets are in conventional certificates of deposit (CDs), figuring your yield is easy. Your bank or other financial services firm will provide not only the interest rate the CD pays, but its annual percentage yield (APY). In most cases, that rate remains fixed for the CD's term.
Return
Your investment return is all of the money you make or lose on an investment. To find total return, generally considered the most accurate measure of return, you add the change in value
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