# Sharpe ratio

- Canonical URL: https://www.gerhardmerk.de/sharpe-ratio
- Post ID: 589794
- Modified: 2023-07-25T21:12:00+00:00
- Language: en

## Definition

Measurement method named after the Nobel Prize winner William Sharpe for assessing the return on the shares of capital management companies. If two funds have generated the same return over the same period, an investment in the fund that has achieved this result with the lower volatility is preferable. - The - return to be achieved without risk from the investment in fixed interest bearing public securities (minuend; minuend) is - deducted from the generated fund return (subtrahend: subtrahend). - The difference as a dividend of the next calculation operation is then - set in relation to the volatility of the respective fund (divisor; divisor). - The quotient is the Sharpe ratio. The higher this value, the more recommendable is the investment in this fund. The same tax treatment is, of course, a prerequisite in both cases. - See yoyo share, leverage theory. Attention: The financial encyclopedia is protected by copyright and may only be used for private purposes without express consent! University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec. Professor Dr. Eckehard Krah, Dipl.rer.pol. E-mail address: info@ekrah.com https://de.wikipedia.org/wiki/Gerhard_Ernst_Merk https://www.jung-stilling-gesellschaft.de/merk/ https://www.gerhardmerk.de/

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