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Risk Adjusted Return On Risk Adjusted Capital (RAR
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A combination of Risk Adjusted Return On Capital (RAROC) and Return On Risk Adjusted Capital (RORAC) in which specific risk adjustments are made to the return stream and the capital charge is varied to reflect different expectations of risk in different businesses. While this may seem like double counting, the adjustments on each side of the process usually cover different risks. See also Return On Risk Adjusted Capital (RORAC), Risk Adjusted Return On Capital (RAROC).
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