Computing and reporting the rate of return (ROR) on an investment is the single most reviewed calculation by investors who are considering a potential investment or who are reviewing the ROR history computed on a current investment. Most investors universally use using the ROR as the primary measure to judge the performance of an investment. It is a logical assumption and provides a direct and mathematically accurate way to judge an investment’s value. Regardless, how the ROR is computed can be very misleading and yield significantly different results.
