Q » Define risk-adjusted return.

06 Dec, 2025

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A » Risk-adjusted return is a financial metric that evaluates an investment's performance by considering the level of risk involved. It provides a more comprehensive understanding of an investment's effectiveness by comparing returns relative to the risk taken. Common methods for calculating risk-adjusted return include the Sharpe ratio, which divides excess return by standard deviation, and the Treynor ratio, which uses beta as the risk measure.

Michael

06 Dec, 2025

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A »Risk-adjusted return measures an investment's return relative to its risk. It helps compare investments with different risk levels. Common metrics include the Sharpe Ratio, Treynor Ratio, and Sortino Ratio, which adjust returns for volatility or downside risk, enabling more informed investment decisions.

David

06 Dec, 2025

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