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What Is a Firm's Markup? What Does It Show

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What is a firm's markup? What does it show?


Definitions:

Excess Return

The return on an investment that exceeds a benchmark or risk-free return.

Bogey Portfolio

An investment portfolio used as a benchmark to measure the performance of other portfolios.

Treynor Measure

A performance metric for determining how well an investment compensates the investor for risk taken, excluding unsystematic risk.

Risk-Free Return

The return on investment with no risk of financial loss, often represented by the yield on government securities.

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