Why is the rate of return is superior to dollar return?

The rate of return is often considered superior to dollar return because it provides a standardized measure of investment performance that accounts for the initial amount invested. It allows for better comparison across different investments, regardless of their scale, by expressing returns as a percentage. This relative measure also helps investors assess the efficiency of their investments over time, facilitating informed decision-making. Additionally, rate of return considers the time factor, making it easier to evaluate the performance of investments that may have different durations.