What Is a Return on Risk-Adjusted Capital?
Risk-adjusted capital gain method (Raroc) Risk-adjusted capital gain is the ratio of income to potential loss or VAR value.
Risk-adjusted capital gains approach
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- Chinese name
- Risk-adjusted capital gains approach
- Foreign name
- Capital income method of risk adjustment
- Risk-adjusted capital gain method (Raroc) Risk-adjusted capital gain is the ratio of income to potential loss or VAR value.
- When a bank using this method makes a decision on its cash use, it does not use the absolute level of profit as a basis for judgment, but a risk management method based on the discounted value of earnings based on the investment risk of the fund.