Sharpe Ratio | Risk Adjusted Return | Mutual funds

Risk Adjusted return measures - SHARPE RATIO, TREYNOR RATIO.

Sharpe Ratio
Reward to Risk Ratio
How much Risk We take ?
How much returns did the scheme Deliver?
Rp = Portfolio Return, Rf = Risk Free Return
Denominator = SD of Portfolio
Risk free return is 5%, and a scheme with standard deviation of 0.5 earned a return of 7%
Rp-Rf = 7% - 5%  2%
Standard Deviation of portfolio = 0.5
Sharpe Ratio = 2 / 0.5 = 4
What does it mean?

[NH-Investment-Services]

I watched many videos about the sharpe ratio, but with this video i got more clarity..thank you

[crazyox]

if Rp-Rf = 7%-5%= 2% then it should be 2%/0.5 = 0.02/0.5= 0.04 right

[mustafaquadri]

how to calculate Standard Deviation in this example