Fixed Income: Gross versus net realized return (FRM T4-27)

Financial Risk Manager (FRM, Topic 4: Valuation and Risk Models, Fixed Income, Bruce Tuckman Chapter 3, Returns, Spreads and Yields). The Gross Realized Return is the holding period return (HPR), so it includes the bond's price change and any coupon income. The Net Realized Return subtracts financing or borrowing cost; in finance, we often subtract a financing cost (aka, funding cost) to account even for the opportunity cost of an investment.
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