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invested value + profit (-loss) =?

Personal Finance & Money Asked on May 15, 2021

What is the financial name which a broker would give to the following returns:

  • invested capital = 1000

  • profit = 2%

  • currentValue1 = 1000*1.02 = 1020 $

  • currentValue2 = 100%+2% = 102%

MarketValue is not the right name for currentValue1, if the position is already closed.

What does currentValue1 and currentValue2 stand for? Are these the gross return, the cash flow or have the two other names (common in financial world)?

2 Answers

$1,000 is investment or cost basis

If the position is still open, $20 is the current gain which is 2% (ROI) and the current or market value would be $1,020.

If the position is closed, it would be called the final value or proceeds from sale.

There are a variety of other interchangeable financial terms to describe the above (profit, gain, yield, return, etc.).

My guess is that this is from a textbook because terms like currentValue1 and currentValue2 tend to come from the academic world.

Correct answer by Bob Baerker on May 15, 2021

  • CurrentValue1 stands for MarketValue
  • CurrentValue2 stands for RelativeChange

You don't realize profit/loss, unless you sell the stock. So, there is no cash flow here.

Answered by Venkataraman R on May 15, 2021

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