Excess Return

This is a measure of an investment's return in excess of a benchmark.

4Calculation

Rt = return of subject for time period t

Rbm,t = return of benchmark for time period t

T = number of periods, and there are n such periods in a year

k = number of years in the holding period

Geometric Method (standard)

Monthly,

Excess Return Annualized,

Arithmetic Method

Monthly,

Annualized,