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 21, 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 21, 2026). |
| Harvard | Barry Goldsmith 2010, risk-adjusted return, Smart Define, viewed 21 September, 2026, <http://smartdefine.org/risk-adjusted_return/definitions/1162657>. |
| MLA | Barry Goldsmith. "risk-adjusted return" 21 October 2010. Web. 21 September 2026. <http://smartdefine.org/risk-adjusted_return/definitions/1162657> |