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cRYPTO Glossary
Explore essential terms and concepts in the world of cryptocurrency, blockchain, and trading
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Average Annual Return (AAR)
Average Annual Return (AAR) refers to the percentage representing the historical average annual return of an investment, portfolio, or asset over a specific period of time.
Explanation:
- Historical return: AAR is calculated by averaging the annual returns of an investment or portfolio over a defined period, typically measured in years.
- Percentage: AAR is expressed as a percentage to provide a standardized measure of the average annual performance of the investment.
- Investment, portfolio, or asset: AAR can apply to individual investments, diversified portfolios, or specific assets such as stocks, bonds, mutual funds, or exchange-traded funds (ETFs).
Key Points:
- Calculation: AAR is computed by adding up the annual returns for each year and dividing by the number of years in the period.
- Evaluation: AAR helps investors assess the average performance and growth rate of their investments over time.
- Utility: AAR is useful for comparing the performance of different investments or portfolios and for estimating future performance based on historical trends.
Valdis Zhvaginsh
Crypto Enthusiast, CWT Editor
Hello, I'm Valdis
When I began exploring cryptocurrencies, I had many questions. Over time, I've gathered some of the best resources that helped me, and I believe they can be useful to you as well.
I hope these resources assist you in starting your journey into the world of cryptocurrencies and provide useful tools for everyday tasks.
If you have any suggestions or corrections, please contact me
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