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Sharpe Portfolio Performance Ratio
Sharpe Portfolio Performance Ratio definition - finance
The value of the average rate of return for
a portfolio during a specific time period minus the average rate of return on
risk-free assets during the same time, then divided by the standard deviation
of the rate of return for the portfolio during the time period. This
performance ratio uses the standard deviation of returns as the measure of
risk. The Sharpe measure evaluates the portfolio manager on the basis of rate
of return and diversification.
Webster's New World Finance and Investment Dictionary Copyright © 2003 by Wiley Publishing, Inc., Indianapolis, Indiana.
Used by arrangement with John Wiley & Sons, Inc.
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