Finance
Calculate the Sharpe ratio
=(B1-B2)/B3How it works in Excel
- B1 is the investment's return.
- B2 is the risk-free rate.
- B3 is its standard deviation.
- Higher is better.
- Use the same period for all three numbers.
The idea in general
It shows how much extra return you got for each unit of risk you took.
What I assumed
- The return is in B1, the risk-free rate is in B2 and the risk is in B3.
Check the result on your own data before relying on it.