 In this segment, we are going to talk about the financial returns interest rate and we are going to also learn what is the technical difference between a financial return and interest rate. So, sometimes people think as if the return is the same as the interest rate but there is a technical difference between the two and they are two distinct concepts, they are two different concepts. When we say a return, it is basically a financial return which person can get if he is holding, if he is making an investment or holding a certain financial instrument for a certain time and whatever loss or gain he will get over that investment over a certain period of time is called the financial return. Whereas the interest rate is the fixed amount of money which is promised by a financial institution that will be given to the person who has invested the money with the financial institution. So, again that is also a function of time, we decide or determine the values of interest rate based upon the time period but the financial return is technically different from the concept of interest rates. So, interest rates are more or less fixed by the central bank of a country like in Pakistan, it is the state bank of Pakistan that fixes the interest rates and then accordingly all the financial instruments that are traded in the business that are offered in the business sector or in the corporate sector, for them the interest rate is decided by the financial institutions according to the interest rates that are decided by the based upon the interest rates that are decided by the central bank. So, when we talk about the rate of return, we are going to take an example in order to understand the concept of how the rate of return can be calculated. So, for example, we are having a coupon bond and we have already discussed the concept of a coupon bond. So, its face value is Rs. 1000 and it is stated that the coupon rate is 10% which means that after every year the person who owns the coupon bond will get 10% of the face value which is assumed to be Rs. 1000 in this example. So, for example, after a year has passed and because of the demand and supply interaction in the bonds market, in the coupon bond market, the price of that coupon bond increased from Rs. 1000 to Rs. 1200 that means Rs. 1200. So, if the person who owns that coupon bond sells the bond in the market, he will get two types of payments, one will be the coupon rate which is assumed to be 10% so he will get 10% of the money which he has invested and then at the top of it he's going to get the difference of the prices, the price at which he has purchased the coupon bond and the price at which he is going to sell the coupon bond, fine. So, in our example, the purchase price was Rs. 1000 and the sale price is Rs. 1200 so there would be a difference of Rs. 200 so when we take into account all this information, we can find out the rate of return and that will be calculated by considering the 10% of Rs. 1000 as the interest which are the coupon rate and then there is a difference of Rs. 200 on the price of the coupon, the sale price and the purchase price. So, we aggregate these two and then divided by the initial price of the coupon bond which is assumed to be Rs. 1000 in this example so as a result we will get Rs. 300 divided by Rs. 1000 and if we convert it into percentage form or if we simplify it, we get that the rate of return for this particular coupon bond in this example turns out to be 30% or 0.3 so in percentage form we can put it as 30% so we can say that although the interest rate or the coupon rate in this example was given to be 10% but when we calculated the rate of return it turned out to be 30% so from here we can understand that the two concepts are different, interest rate is should not be assumed to be the same as the rate of return we need to use the formula which I have just used to find out the values of the rate of return whereas the interest rates are usually given in the scenario or given by the financial institutions or given by the central bank of a country.