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


Accounting | Banking | Bonds | Brokers | Economy | Futures | Mutual Funds | Options | Real Estate | Retirement | Stocks | Taxes | Technical Analysis
Home | 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