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Quantitative Methods - 2) Types of Financial returns - Coggle Diagram
Quantitative Methods - 2) Types of Financial returns
2.1 Financial assets, instruments and indicators
Types of returns
2 Components of Return
Price return (capital appreciation)
Capital distribution return
Income paid out can be:
Fixed (rate set in advance)
Variable (rate depends on something like floating rate)
Total return = Price return + Capital distribution return
Types of financial instruments
Equities
Price return (return type) and Dividends (Distribution type)
Bonds
return type: coupons
distribution type: Usually fixed
Derivatives
Value derived from reference assets
Types of financial indicators
Foreign exchange rate
Formula
Interest Rates
Market Index
2.2 Long Term Returns on Financial Assets