Active return

Active Return
Active Return definition :
Return relative to a benchmark. If a portfolio's return is 5%, and the benchmark's return is 3%, then the portfolio's active return is 2%.
What's A Spread?

ACTIVE RETURN - Return relative to a benchmark. If a portfolio's return is 5%, and the benchmark's retu...
ACTIVE RISK - The risk (annualized standard deviation) of the active return. Also called the tracking e...

For example, a particular investor might trade an uncertain expected 4% active return with 6% risk, for a certain active return of 1.5%. Used as a way to incorporate individual investor risk tolerances into financial decisions.

As opposed to determining the contribution of uncontrollable market factors to active return, the type of analysis described here is meant to evaluate the effect of each (type of) controllable decision on the active return, ...

The risk (annualized standard deviation) of the active return. Also called the tracking error.
Actual market
Used in context of general equities. Firm market. Antithesis of Subject market.
Actuals ...

Stock market is a complex field that requires good understanding and knowledge in order to achieve attractive return.

The certain (zero risk) return an investor would trade for a given (larger) return with an associated risk. For example, a particular investor might trade an uncertain expected 4% active return with 6% risk, for a certain active return of 1.5%.

These investments usually pay a more attractive return or yield than safer investments, such as blue chip stocks and high-grade bonds. However, higher-risk ventures mean a greater likelihood of investment loss.

So my expected average return on this portfolio assuming the companies continue to make 14.19% ROEs and continue to retain 66% of earnings is 11.5%. An attractive return and far better than the 6.25% that the 16.0 P/E (1/16 E/P) at first suggested.

See also: Saving, Expense, Values, Banks, Offer price