Term of the Day - abnormal return
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Today's Term of the Day - abnormal return
The difference between the return on a stock (or entire portfolio) and the performance of an index, such as the S&P 500. The abnormal return is equal to the market return - the normal return. For example, a stock that provided a return of 10% over the same period of time in which an index provided a 6% return would have an abnormal return of 10% - 6% = 4%. If the abnormal return is negative then it has underperformed the index.Tip of the Day from InvestorWords Tips
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