Cryptocurrency Q&A
What is cryptocurrency excess market return (cmkt)?
What is cryptocurrency excess market return (cmkt)?
Michele
Tue Jul 09 2024
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7 answers
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Could you please elaborate on the concept of cryptocurrency excess market return (CMKT)? I'm curious to understand what it represents in the realm of cryptocurrency finance. Specifically, I'm interested in how it differs from traditional market returns and what factors influence its calculation. Is it a measure of how a particular cryptocurrency outperforms the overall market, or does it capture something else entirely? Also, how do investors typically utilize CMKT in their decision-making processes? Thank you for clarifying this intricate financial concept.
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7 answers
noah_smith_researcher
Thu Jul 11 2024
It is calculated by subtracting the risk-free rate, typically represented by the one-month Treasury bill rate, from the return of the cryptocurrency market index.
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CryptoLordess
Thu Jul 11 2024
This methodology allows for a direct comparison of the profitability of cryptocurrency investments with traditional, low-risk investments.
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EtherealVoyager
Thu Jul 11 2024
Panel B of Table 1 provides a summary of the statistical properties of the CMKT, offering insights into its behavior and characteristics.
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CryptoAlchemy
Thu Jul 11 2024
By analyzing these statistics, investors can gain a better understanding of the potential risks and rewards associated with investing in cryptocurrencies.
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CryptoWizard
Thu Jul 11 2024
The cryptocurrency market excess return (CMKT) serves as a measure of the performance of digital currencies relative to a risk-free investment.
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