RISK ADJUSTED RETURN


Meaning of RISK ADJUSTED RETURN in English

Often we subtract from the rate of return on an asset a rate of return from another asset that has similar risk . This gives an abnormal rate of return that shows how the asset performed over and above a benchmark asset with the same risk. We can also use the beta against the benchmark to calculate an alpha which is also risk adjusted preformance.

Campbell R. Harvey. Hypertextual finance English glossary.      Английский словарь гипертекстовых финансов.