Why is measuring ROI particularly important for investors?

Measuring ROI, or Return on Investment, is particularly important for investors because it serves as a key metric to assess investment performance. ROI provides insights into how effectively an investment has generated profit relative to its cost. This evaluation allows investors to compare different investment opportunities, understand the efficiency of their capital allocation, and make informed decisions about where to invest next.

By calculating ROI, investors can determine whether the returns from an investment justify the risks and costs involved. This understanding is crucial for optimizing investment strategies and maximizing overall returns in a diverse portfolio. While the other statements touch on aspects related to investments, they do not directly address the core purpose of ROI measurement in assessing and comparing performance.