The Sharpe Ratio is a widely used financial metric that measures an investment's risk-adjusted return. It helps investors understand the excess return they re.. Sharpe Ratio plays a significant part in evaluating the performance of an investment. Developed by American economist and Noble laureate William F. Sharpe, the Sharpe Ratio measures the risk-adjusted returns of an investment. It can be taken into account before starting investing in any fund. Learn how to calculate the Sharpe Ratio, a common metric to evaluate the performance of an investment or a portfolio. Find out the meaning, formula, grading thresholds, and examples of the Sharpe Ratio and its variations. The Sharpe Ratio is a key metric used to evaluate the risk-adjusted performance of a mutual fund. It measures the excess return generated by the fund relative to a risk-free asset, such as a fixed deposit, per unit of risk taken. A higher Sharpe Ratio generally indicates better risk-adjusted performance, meaning the fund has generated higher returns for the level of risk assumed. However, it's important to remember that higher returns often come with increased risk. In this guide, we will ...
