Rate of return Calculated as the (value now minus value at time of purchase) divided by value at time of purchase. For equities, we often include dividends with the value now. See also: Return, annual rate of return. Rate of Return In securities, the amount of revenue an investment generates over a given period of time as a percentage of the amount of Fair rate of return – risk. You can say that there is a fair rate of return when it justifies the risk. Investors can, for example, invest their money in a super-safe security and earn a risk-free return. If they invested in a riskier asset, on the other hand, they would expect to earn a premium. Rate of return pricing is a method by which a company fixes the price of the product in such a way that it ultimately helps organisations in achieving the ultimate goal or return on the capital employed. This is a common practice, but can only be effective in cases or products which have very little competition. Description: The concept of