The risk-free rate of return is one of the most basic components of modern finance. The risk-free asset only applies in theory, but its actual safety rarely comes into question until events fall far ...

Rate of return represents the percentage net gain or loss of an investment's initial cost over a period of time. The rate of return calculates the percentage change from the beginning to the end of a ...

If an investment adviser touts an impressive average rate of return, be very wary, because losses can “hide” among the gains and hinder your financial success. Let’s explore the meaning of average ...

What Is the Risk-Return Profile? The risk-return profile of an investment refers to the trade-off between the potential returns and the risk of losing money. Higher returns typically come with higher ...

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A higher Sortino ratio can indicate a good return relative to the risk taken. The Sortino ratio focuses on downside volatility, while the Sharpe ratio considers both upside and downside volatility in ...

High risk-adjusted returns suggest efficient performance for the invested capital. Low risk-adjusted returns indicate potentially suboptimal investments. Comparing risk-adjusted returns helps select ...

The risk-free rate is the rate of return offered by an investment that carries zero risk. Every investment asset carries some level of risk, however small, so the risk-free rate is something of a ...