Question: What is a risk adjusted return
What is a risk-adjusted return?
Relevant QuestionsWhat are the differences between financial and real assets? Assume the real rate of return in the economy is 2.5 percent, the expected rate of inflation is 5 percent, and the risk premium is 5.8 percent. Compute the risk-free rate (Formula 1-3) and required rate of return. What generally determines how firms are listed in a tombstone advertisement? What does a high R2 (correlation) between a fund’s excess returns and the market’s excess returns indicate about the fund manager’s ability to effectively diversify? Assume a second firm that evaluates portfolios uses the Treynor approach to measuring performance. The firm is also evaluating the three portfolios in problem 1. The portfolio betas are as follows: a. Using the Treynor ...
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