A Risk-Adjusted Model for Peformance Measurement

Abstract

This chapter outlines the foundations of a risk-adjusted performance (RAP) measure for calibrating performance in the exchange industry. As previously noted, it has only been with the demutualization and listing of securities exchanges that the emerging firm view has elicited renewed attention with regard to performance measurement in the industry. However, both academic researchers and industry practitioners have so far only focused on standard measures of operative performances such as return on equity (or the return on tangible equity) or the return on assets (ROE and ROA, respectively).