Sharpe Ratio Risk Adjusted Return Mutual funds
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Risk Adjusted return measures - SHARPE RATIO, TREYNOR RATIO. • Sharpe Ratio • Reward to Risk Ratio • How much Risk We take ? • How much returns did the scheme Deliver? • Rp = Portfolio Return, Rf = Risk Free Return • Denominator = SD of Portfolio • Risk free return is 5%, and a scheme with standard deviation of 0.5 earned a return of 7% • Rp-Rf = 7% - 5% 2% • Standard Deviation of portfolio = 0.5 • Sharpe Ratio = 2 / 0.5 = 4 • What does it mean? • Mutual Fund Exam Mock Tests https://nism.modelexam.in/nism-mutual...
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