Reserve requirements and Return: Difference between pages

From ACT Wiki
(Difference between pages)
Jump to navigationJump to search
imported>Doug Williamson
(Add link.)
 
imported>Doug Williamson
(Add link.)
 
Line 1: Line 1:
''Banking''. 
1. ''Investment appraisal.''


The minimum ratio of vault cash and balances ('[[reserves]]') with the [[central bank]] to deposits taken by the bank that the central bank requires commercial banks to hold.  
Return is the surplus of the money amount received back from an investment, compared with the initial amount invested.  


An increase in minimum reserve requirements will be likely to lower the supply of money in the economy as banks undertake less lending, and vice versa.
Or the surplus of the current value, over and above the initial amount invested.


Interest earned is an example of an investment return.


The greatest possible ratio would be 100%.  This is known as '100% reserve banking'.


Any smaller ratio is known as 'fractional reserve banking'.  
Returns can be negative.
 
Negative returns mean that the amounts received back from an investment are less than the amounts initially invested.
 
 
2. ''Investment appraisal.''
 
An abbreviation for ''rate of return''.
 
 
To facilitate comparisons, rates of return are usually expressed as a percentage of the initial amount invested, often as an effective annual rate of return.
 
When expressed on this basis, the rate of return is also known as 'yield'.
 
 
3. ''Investment appraisal.''
 
Return can also sometimes mean the ''total'' money amount received back at the end of investment period, including the initial amount invested.
 
Here as elsewhere, transparency and consistency of definitions are essential.
 
 
4. ''Reporting.''
 
A return is also a regular and standard-formatted report.
 
For example, a tax return made to a tax authority.




== See also ==
== See also ==
* [[Monetary policy]]
*[[Accounting rate of return]]
* [[Interest on excess reserves]]
*[[Annual return]]
* [[RRR]]
*[[Continuously compounded rate of return]]
*[[Diminishing returns]]
*[[Excess Return]]
*[[Expected rate of return]]
*[[Financial risk]]
*[[Holding period return]]
*[[Interest]]
*[[Internal rate of return]]  (IRR)
*[[Investment appraisal]]
*[[Performance spread]]
*[[Portfolio investment]]
*[[Profit]]
*[[Rate of return]]
*[[Real return]]
*[[Return on assets]]
*[[Return on capital]]
*[[Return on equity]]
*[[Return on investment]]
*[[Return on sales]]
*[[Revenue]]
*[[Rewarded risk]]
*[[Risk]]
*[[Risk free rate of return]]
*[[Shareholder returns]]
*[[Sharpe ratio]]
*[[Total return]]
*[[Total return swap]]
*[[Total shareholder return]]
*[[VAT return]]
*[[Yield]]
 
[[Category:Corporate_finance]]

Revision as of 11:47, 23 July 2022

1. Investment appraisal.

Return is the surplus of the money amount received back from an investment, compared with the initial amount invested.

Or the surplus of the current value, over and above the initial amount invested.

Interest earned is an example of an investment return.


Returns can be negative.

Negative returns mean that the amounts received back from an investment are less than the amounts initially invested.


2. Investment appraisal.

An abbreviation for rate of return.


To facilitate comparisons, rates of return are usually expressed as a percentage of the initial amount invested, often as an effective annual rate of return.

When expressed on this basis, the rate of return is also known as 'yield'.


3. Investment appraisal.

Return can also sometimes mean the total money amount received back at the end of investment period, including the initial amount invested.

Here as elsewhere, transparency and consistency of definitions are essential.


4. Reporting.

A return is also a regular and standard-formatted report.

For example, a tax return made to a tax authority.


See also

Retrieved from ‘https://wiki.treasurers.org/w/index.php?title=Reserve_requirements&oldid=41425’