What Is a Rate of Return (RoR)? A rate of return (RoR) is the net gain or loss of an investment over a specified time period, expressed as a percentage of the investment’s initial cost. When calculating the rate of return, you are determining the percentage change from the beginning of the period until the
What Is Rate of Return Regulation? Rate of return regulation is a form of price setting regulation where governments determine the fair price which is allowed to be charged by a monopoly. It is meant to protect customers from being charged higher prices due to the monopoly’s power while still allowing the monopoly to cover
DEFINITION of Ratings Service Ratings range from AAA or Aaa (the highest) to C or D, which represents a company that has already defaulted. BREAKING DOWN Ratings Service While fixed income and bonds investments can inject a measure of diversification in a common stock portfolio, these vehicles can be complicated, with variant risk profiles. A standardized ratings
What Is Ratio Analysis? Ratio analysis is a quantitative method of gaining insight into a company’s liquidity, operational efficiency, and profitability by studying its financial statements such as the balance sheet and income statement. Ratio analysis is a cornerstone of fundamental equity analysis. Key Takeaways Ratio analysis compares line-item data from a company’s financial statements
What Is Rational Behavior? Rational behavior refers to a decision-making process that is based on making choices that result in the optimal level of benefit or utility for an individual. The assumption of rational behavior implies that people would rather take actions that benefit them versus actions that are neutral or harm them. Most classical
What Is Rational Choice Theory? Rational choice theory states that individuals use rational calculations to make rational choices and achieve outcomes that are aligned with their own personal objectives. These results are also associated with maximizing an individual’s self-interest. Using rational choice theory is expected to result in outcomes that provide people with the greatest
What Is Rational Expectations Theory? The rational expectations theory is a concept and modeling technique that is used widely in macroeconomics. The theory posits that individuals base their decisions on three primary factors: their human rationality, the information available to them, and their past experiences. The theory suggests that people’s current expectations of the economy
What Is Rationing? Rationing is the practice of controlling the distribution of a good or service in order to cope with scarcity. Rationing is a mandate of the government, at the local or federal level. It can be undertaken in response to adverse weather conditions, trade or import/export restrictions, or, in more extreme cases, during
Raúl Alarcón Jr. is a broadcasting mogul who oversees the Spanish Broadcasting System, one of the largest Spanish-language media companies in the United States. Alarcón is the company’s chief executive officer (CEO) and chairman. He joined the company, which was founded by his father Pablo, in its sales department in 1983. Commonly referred to as
What Are Raw Materials? Raw materials are materials or substances used in the primary production or manufacturing of goods. Raw materials are commodities that are bought and sold on commodities exchanges worldwide. Businesses buy and sell raw materials in the factor market because raw materials are factors of production. Key Takeaways Raw materials are the input goods or inventory
