A target return on equity measure in which the denominator is adjusted depending on the risk...
risk-adjusted return on risk-adjusted capital RARORAC
Risk-adjusted return on risk-adjusted capital is the combination of risk-adjusted return on capital (RAROC) and return on risk-adjusted capital (RORAC) in which both the numerator and denominator are adjusted (for different risks).
Additional Information
This is a term used in the financial services industry and in enterprise risk management.
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