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Abnormal Return |
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Abnormal Return The difference between the expected return and the actual return on an investment. An abnormal return may be either positive or negative; indeed, an abnormal return may be negative even if the actual return is positive. For example, suppose the expected return on an investment is 7% and the actual return is 5%. While the investor has 5% more than he/she had when he/she started, the abnormal return is still -2%. On the other hand, if the expected return is 5% and the actual return is 9%, then there is a positive abnormal return of 4%. One may calculate the abnormal return to gauge the accuracy of various asset pricing models. How to thank TFD for its existence? Tell a friend about us, add a link to this page, add the site to iGoogle, or visit webmaster's page for free fun content. |
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| ? Mentioned in | ? References in periodicals archive | ||
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| Brearley added: "However, this abnormal return is both statistically and economically insignificant. For each group of announcements partitioned by Tobin's q, repurchase size, and time lag, we test whether the average abnormal return is significantly different from zero. The median abnormal return in the (-1, +1) period is 18. |
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