Often we subtract from the rate of return on an asset a rate of return from another asset that has similar risk. This gives an abnormal rate of return that shows how the asset performed over and above a benchmark asset with the same risk. We can also use the beta against the benchmark to calculate an alpha, which is also risk-adjusted performance.
Barry Goldsmith
| APA | Barry Goldsmith. (2010). Risk-adjusted return. Retrieved September 20, 2026, from http://smartdefine.org/risk-adjusted_return/definitions/1162657 |
| Chicago | Barry Goldsmith. 2010. "Risk-adjusted return" http://smartdefine.org/risk-adjusted_return/definitions/1162657 (accessed September 20, 2026). |
| Harvard | Barry Goldsmith 2010, Risk-adjusted return, Smart Define, viewed 20 September, 2026, <http://smartdefine.org/risk-adjusted_return/definitions/1162657>. |
| MLA | Barry Goldsmith. "Risk-adjusted return" 21 October 2010. Web. 20 September 2026. <http://smartdefine.org/risk-adjusted_return/definitions/1162657> |