Marginaaliprosentti

Marginaaliprosentti, which translates to "marginal percentage" in English, is a financial concept originating from the fields of accounting and economics. It represents the difference between the return on investment (ROI) of a security or a portfolio and the return on a risk-free asset, typically a government bond. The term is commonly used in Finnish and European financial contexts.

The concept of marginaaliprosentti is primarily used to gauge the excess return an investment generates over a benchmark or a risk-free rate. In other words, it measures the return an investor earns beyond what they could have earned by investing in a risk-free asset. This serves as a point of reference for investors who can compare their potential returns relative to the benchmark.

Marginaaliprosentti is often used in the context of analyzing the performance of a portfolio manager or a fund manager. It helps investors evaluate the manager's skill level in generating returns, separate from the overall market conditions. A high marginaaliprosentti may indicate that the manager is able to generate excess returns, either through skillful investment decisions or a fortunate investment environment.

In practical terms, the marginaaliprosentti is typically calculated by subtracting the return on the risk-free asset from the return on the investment or portfolio. The resulting percentage then represents the excess return earned by the investment, offering a metric for investors to assess its performance relative to risk-free rate.

This financial concept is fundamental to understanding investment returns and evaluating the performance of financial managers in various European financial contexts.