The Rate of Return on Investment

There is much discussion today on the topic of rate of return, without a clear definition of its parameters. This monograph carefully defines the return and the investment, numerator and denominator of the rate. The author debunks certain common misuses of accounting terms. There can be no investment income on a loss reserve. Return on capital is not the same thing as return on surplus, which is close to meaningless. An example relating the return on investment to the profit provision in the rates is provided.