A measurement of risk-adjusted return which calculates the return (or expected return) of an investment in excess of a “risk-free” security, using short-term U.S. Treasury bills as a proxy. The Sharpe Ratio is calculated as the (Return minus the Risk-Free-Rate) divided by Volatility. Relates to debt, equity, and real estate.
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by bsmith@carofin.com | May 29, 2024