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How is Sharpe ratio calculated?
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The Sharpe ratio is a measurement used to understand the return of an investment compared to its risk. This tool was named after William F. Sharpe, a Nobel laureate and creator of the method.
To calculate the Sharpe ratio, you must subtract the risk-free rate from the expected portfolio return. The result is then divided by the standard deviation of the portfolio’s excess return.
Jan 11th 2024 06:36
Maximize your returns with...The Sharpe ratio is a measurement used to understand the return of an investment compared to its risk. This tool was named after William F. Sharpe, a Nobel laureate and creator of the method.
To calculate the Sharpe ratio, you must subtract the risk-free rate from the expected portfolio return. The result is then divided by the standard deviation of the portfolio’s excess return.
Jan 11th 2024 06:36
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