risk ratio

Explained: How to interpret Treynor Ratio in mutual funds

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Explained: How to interpret Treynor Ratio in mutual funds

Investing in mutual funds involves balancing potential returns with the risks taken to achieve those returns. To evaluate how well a mutual fund performs against the risks incurred, financial metrics like the Treynor ratio are used. This ratio measures the risk-adjusted performance of a fund by focusing on the excess return generated per unit of … Read more

Explainer: Sharpe Ratio – A key metric for risk-adjusted returns

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Explainer: Sharpe Ratio – A key metric for risk-adjusted returns

Sharpe Ratio is one of the most crucial tools for evaluating the performance of mutual funds. This was developed by Nobel laureate William F. Sharpe, and measures the risk-adjusted return of an investment, helping investors determine whether the returns of a mutual fund are sufficient given the level of risk taken. The Sharpe Ratio of … Read more