Q. Explain Traditional Method of Measurement?
Computation of yield to measure a financial asset's return is the simplest and oldest technique of measurement. Yield can be find out by following formula.0Expected Cash Income a same as current assets
(b) Actual yield = Cash Income Amount Invested
The yield that is calculated is for a particular period to find out the return on the amount that is invested. Yield can be computed both for bonds and stocks.
Bonds: Bonds usually have a maturity period. Yield on them can be calculated either for the current period or on maturity. While it is advisable to find out yield to maturity and it is also the common practice, yet the current yield on the bonds can also be found out.