Certainty Equivalent Return


Certainty Equivalent 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%. Used as a way to incorporate individual investor risk tolerances into financial decisions. Bloomberg Financial Dictionary

Financial and business terms. 2012.

Look at other dictionaries:

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