Sharp Ratio

The Sharpe ratio was founded by Nobel laureate William F. Sharpe; it helps investors to assess the return on investment versus its risk and volatility.

Therefore the formula for calculating the Sharpe ratio is:

Sharpe ratio= Expected Return- Risk-Free Rate of Return/ Standard Deviation

Sharpe ratio is often used at the portfolio level to determine whether changes in allocation will positively or negatively impact its risk-adjusted return.

This help page and the information contained herein is provided for informational and discussion purposes only and is not intended to be a recommendation for any investment or other advice of any kind, and shall not constitute or imply any offer to purchase, sell or hold any security or to enter into or engage in any type of transaction.

Investing in venture capital funds is inherently risky and illiquid. It involves a high degree of risk and is suitable only for sophisticated and qualified investors.