Abnormal Returns
Financial Dictionary — Finance & Investment
Definition
is the difference between the actual return and that is expected to result from market movements -normal return.
Use cases, Example & Why it matters
Use cases
- Used in treasury and financial management for funding, investment, and risk decisions.
- Used to evaluate cash flows, financing costs, and capital structure.
- Used to evaluate cash flows, financing costs, and capital structure.
Example
- Example: Finance teams use **Abnormal Returns** when planning funding needs and managing cash and risk.
Why it matters
- Why it matters: Supports liquidity and risk control and improves the quality of financing and investment decisions.