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Glossary Mutual Fund / Term

Sharpe Ratio

This ratio enables investors to judge the return from a particular investment as compared to the risk involved. Investments with higher sharpe ratio are considered better as it indicates that the investment can yield better results for every incremental unit of risk.

It acts as a rational justification for the inherent volatility of an investment. It is named after its creator William F. Sharpe.

Permanent link Sharpe Ratio - Creation date 2020-05-23


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