Chapter 9 Flashcards
1
Q
What is the Sharpe Index?
A
A measure of the excess return for every unit of risk that is taken in order to achieve that return.
standard deviation of the return on the investment
The higher the ration, the better the risk adjusted performance.
2
Q
What is Alpha?
A
The difference between the return you would expect and the return it produced
3
Q
What is Beta? ß
A
The extent to which the return moves up or down with the market (the market has a beta of 1)
