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Excess Returns

   Also found in: Wikipedia 0.03 sec.
Excess Returns
Returns in excess of the risk-free rate or in excess of a market measure (such as an index fund).

Notes:
In other words, when you have excess returns you are making more money than if you put your money into an index fund like the Dow (DJIA).


Excess returns
Difference between an asset's return and the riskless rate. Sometimes confused with abnormal returns, returns in excess of those required by some asset pricing model.

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In exchange, they would also reap all the excess returns, thus providing adequate returns on a risk-adjusted basis.
For example, future market performance for year +1 is the sum of excess returns from the fifth day after the announcement date to the same date in the following year.
Preferred returns involve cash investors who receive a set percentage based on the money they put into the deal or a specific percentage of the investment is allocated then the excess returns are distributed.
 
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