RISK ADJUSTED RETURN Definition

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RISK ADJUSTED RETURN is when we subtract from the rate of return on an asset a rate of return from another asset that has similar risk. This gives an abnormal rate of return that shows how the asset performed over and above a benchmark asset with the same risk. We can also use the beta against the benchmark to calculate an alpha which is also risk adjusted performance.

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LAPPING is a scheme to cover an embezzlement by using payments made by one customer to reduce the receivables balance of another customer.

SUPPLIERS provide goods or services to an audited entity. Sometimes called vendors.

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