What are the 2 components of the periodic return?

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Two components of Periodic return are Appreciation or depreciation in value of Investments called capital gain and another is Cash flows received or distribution received.

Appreciation or Depreciation in value of Investments: In case of any Investments, Return comprises of Periodic growth. Like stock value may increase or decrease. If stock value increase with respect to.opening value, periodic Return is positive. If stock value decreases with respect to opening value, Return decreases. Other name for Change in value is Capital gain.

Cash flows received: Investments may provide return in form of cash flows, like dividend received in case of stock or interest received in case of bonds. This forms part of Periodic return. In case of stock, it is also called dividend yield. So one more component of Periodic Return is Cash flows or Distribution received. Other name is dividend or current yield.

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