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Q » Explain Sharpe ratio.

Steven

06 Dec, 2025

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A » The Sharpe ratio is a key financial metric used to assess the risk-adjusted return of an investment. It is calculated by subtracting the risk-free rate from the investment's return and dividing the result by the investment's standard deviation. A higher Sharpe ratio indicates a more favorable risk-reward scenario, as it represents greater returns per unit of risk, making it a valuable tool for comparing different investment opportunities.

Michael

06 Dec, 2025

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A »The Sharpe ratio is a financial metric that measures an investment's excess return over the risk-free rate, relative to its volatility. It helps investors evaluate risk-adjusted performance. A higher Sharpe ratio indicates better risk-adjusted returns. It's calculated as (investment return - risk-free rate) / standard deviation of investment returns.

David

06 Dec, 2025

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