Named after its founder Nobel Laureate William Sharpe, the Sharpe Ratio helps study the risk-adjusted performance of a mutual fund. Technically, the ratio is defined as the excess returns of a scheme ...

The Treynor ratio and the Sharpe ratio are financial metrics that use different approaches to evaluate the risk-adjusted returns of an investment portfolio. The Treynor ratio employs beta and measures ...

Hope for performance, but prepare for risk. For most people in the financial world, performance is key. When you see an ad for a mutual fund, the first thing you're likely to see is how well the fund ...

Individual investors typically look at their accounts in terms of profit/loss. For professional portfolio managers, the assumption is that they will make a profit over the long run, so they're ...

To know what the future may bring, you can't just look at past returns. To know whether you've made a good investment, you need to know more than just the return you're expecting to make. You also ...

Every investment carries with it some level of risk and reward. Unfortunately, these are unknown variables. They change over time and in the face of market factors, and there’s no way of knowing ...

You’ve probably heard investing professionals talk about risk-adjusted returns. This is a way of measuring the performance of an investment that factors in risk—specifically, the extra risk required ...