Question
What are abnormal returns and why would an investor want to earn them?
What are abnormal returns and why would an investor want to earn them?
Answers
Answer:
Abnormal return is the difference the actual return and the expected return of a security.A security(investment) abnormal return,positive or negative,measure how it performed over a given period.Abnormal return are used to evalaute stock's performance against the market return.Any investment earning abnormal return are performing better than expected.Thus ,every investor want to earn abnormal return.
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