ROI is an acronym for what term?

Return on Investment, abbreviated as ROI, is a widely used financial metric that measures the profitability or efficiency of an investment. It calculates the gain or loss generated relative to the amount of money invested. This metric is critical for investors as it helps assess how well an investment has performed over time and allows for comparing the profitability of various investments.

ROI is particularly valuable because it provides a straightforward way to evaluate the potential return from an investment, making it easier for individuals and businesses to make informed financial decisions. A higher ROI indicates that the investment has earned more relative to its cost, which is generally a desirable outcome.

In contrast, other options such as Rate of Interest, Residual Output Index, and Reinvestment of Overhead Income do not convey the same universal financial concept associated with measuring investment performance. Therefore, understanding ROI is essential for effective financial analysis and decision-making.