The Rate of Return is an amount of income (loss) and/or change in value realised or anticipated on an investment, expressed as a percentage of that investment. The rate of return is one of the most important bases for assessing investments to determine which investments are the most attractive. The nominal rate of return does not take into consideration the rate of inflation. When inflation is factored into the computation of the rate of return, the result is the real rate of return. There is a direct positive correlation between the expected rate of return and the risks associated with the investment and the higher the risks the higher the expected rate of return and vice versa. Therefore, when investors commit to higher than normal expected rate of returns from an investment, it is an indication of perceived higher risk which sometimes do not manifest. In business valuation analytical work, the rate of return is one of the most important inputs for the computation of the discount rate.