excess return

excess return definition - business

excess return

The return on an asset or a portfolio in excess of the risk-free return. If short-term corporate debt provides a return of 4 1/2 % while U.S. Treasury bills are yielding 3 1/2 %, excess return on the corporate debt is 1%. Excess return is usually correlated with the risk of an investment.

The American Heritage® Dictionary of Business Terms Copyright © 2009 by Houghton Mifflin Harcourt Publishing Company. Published by Houghton Mifflin Harcourt Publishing Company. All rights reserved.

Comments
Improve this definition.
Do you have more to add? Share your linguistic knowledge or observation.
/Register to save your comments.