Excess return is the return on an investment that is greater than the return of a benchmark index. It is the return that is earned in excess of the risk-free rate of return.
Excess return is a measure of the return on an investment that is greater than the return of a benchmark index. It is a measure of the performance of an investment relative to a benchmark index. It is also known as alpha, or alpha return.
Excess return is calculated by subtracting the return of a benchmark index from the return of an investment. For example, if an investment has a return of 10% and the benchmark index has a return of 8%, then the excess return is 2%.
Excess return is an important measure of the performance of an investment. It is used to compare the performance of an investment to a benchmark index and to determine whether the investment is outperforming or underperforming the benchmark.
Excess return can be used to measure the performance of a portfolio of investments. It can also be used to measure the performance of a single investment.
Excess return is a useful measure of the performance of an investment, but it is not the only measure. Other measures of performance include risk-adjusted return, Sharpe ratio, and Treynor ratio.
Excess return is an important measure of the performance of an investment, and it is used by investors to compare the performance of an investment to a benchmark index. It is also used to measure the performance of a portfolio of investments.