The position in risky securities can be specified as the number of shares
of stock held by an investor. The price of one share at time t will be denoted
by S(t). The current stock price S(0) is known to all investors, but the future
price S(1) remains uncertain: it may go up as well as down. The difference
S(1) − S(0) as a fraction of the initial value represents the so-called rate of
return, or briefly return: