Actual gains of a return which is realized due to the amount of what is prepared by the value of a portfolio over an evaluation that is for specific period. Considering the assets which generated cash under the assets contained within the portfolio, as a result of any losses incurred due to a shift in the individual value of the assets.
It is also possible to identify the realized return associated with each asset that is held in the portfolio. There are three components of Stocks Realized returns: the expected return, the return due to cash flow news, and the return due to discount rate news. Of these three components, only the expected return reflects the firm's cost of equity. The firms with lower level of accrual quality which is systematically receivable of accrual quality which are negative in cash flow has gain in near future, then asset pricing analysis with the aim of using average return of realized proxy for expected returns are biased against finding a positive relationship between accrual quality and the cost of equity. (Allen, 1988)
Systematic and Unsystematic Risk
Systematic risk arises due to changes in local and global macro-economic indicators, economic decisions, the policies of governments, central banks' decisions, which affect interest rates on loans and even the wave of economic recession. These are just some examples of systematic risk. They arise from the inherent dynamics of the economy and the inflow of funds over the world.
Unsystematic risks are associated with the sector-specific and are due to problems endemic to a particular company that you have invested in. Some examples of unsystematic risk of a strike, a decline in sales of the company or any other problem that arises from the level of human error in decisions concerning the management level, the ...