Investor Glossary-excess returnsInvestor Glossary-excess returnsInvestor Glossary-excess returnsInvestor Glossary-excess returnsInsightful stock market charts - Click here
investor
Categories    # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Excess Returns

The HTML to link to this page
 

Excess returns are generally defined as the returns provided by a given portfolio minus the returns provided by a risk-free asset. Excess returns are those in excess of the riskless asset. Excess returns are associated with the Capital Asset Pricing Model which postulates that riskier investments must offer higher returns to compensate investors for added risk. Excess returns can be negative if the returns an asset provides are less than the risk-free rate. Some investors don't distinguish between "excess returns" and "abnormal returns"; others claim the terms are different. These investors agree that excess returns measure the difference in the returns of a portfolio and a riskless asset. They argue, however, that abnormal returns differ from excess returns and measure the difference in returns between a portfolio and a market benchmark such as the S&P 500.



Rate this excess returns definition...

Learn about investing with the Investor Glossary Term of the Day


Click here for insightful stock market charts. Where is the market headed? The answer may surprise you. Find out
with the exclusive & Barron's recommended charts of Chart of the Day.


Popular Terms: 1035 exchange, phantom income, command economy, diluted share, LIBOR, per diem, ex-dividend date, debt service coverage, cancelled check, Zero Cost Collar, dividends payable, implied volatility, 1031 exchange, labor relations, 144a, covered put, irrevocable trust, class C shares, quality assurance, liquidity ratio, annual return, deferred tax, margin rate, reverse mortgage, deferred revenue, inflation, stock market close, limit order, retained earnings, VIX, current ratio, FTSE, Key Rate Duration, balance sheet, APR, required rate of return, stock split, FICO score, 401a, minority interest, open position, real GDP, option premium, wholly-owned subsidiary, risk management, ex-dividend, in escrow, average price per share, EBITDA


Accounting | Banking | Bonds | Brokers | Economy | Futures | Mutual Funds | Options | Real Estate | Retirement | Stocks | Taxes | Technical Analysis
Investor Glossary | Term of the Day | Suggest a Term | Chart of the Day | Dogs of the Dow
©2004-2016 Investor Glossary - All rights reserved - Terms of Use