Expected return: related pages
Abnormal return The excess of actual return over the level of return that would be expected given the riskiness of a portfolio.
Absolute return An absolute return is the actual amount of money made by an investment ; the actual gain as a percentage of the amount invested.
Real return The return on an investment, less the reduction in its value as a result of inflation.
Risk premium The difference between the rate of return on a security (or a market or an investment) and the risk free rate of return.
Equity risk premium The difference between the expected rate of return of the stock market and the risk free rate of return; the amount of extra return investors demand for taking the extra risk of equity investment.
Alpha (Jensen's alpha, portfolio alpha) The alpha of a security or fund is its out-performance over the risk adjusted return, with risk measured by beta.
Arbitrage pricing theory Arbitrage pricing theory; a valuation method which is theoretically sound but which is difficult to apply in practice.
CAPM A method of valuing securities or an investment using a discounted cash flow (DCF) using a risk adjusted discount rate.
Risk aversion The preference of investors for the less risky of investments with identical expected returns.
Copyright Graeme Pietersz © 2005-2019
