Skip to Content

return on risk-adjusted capital (RORAC)

A target return on equity measure in which the denominator is adjusted depending on the risk associated with the instrument or project.

On This Page

return on risk-adjusted capital (RORAC)

A target return on equity measure in which the denominator is adjusted depending on the risk associated with the instrument or project.

Additional Information


This is a term used in the financial services industry and in enterprise risk management (ERM). In the insurance industry, risk-adjusted return on capital (RAROC) is the term commonly used.

Related Terms