**It is a method, which is used to measure the fund’s risk-adjusted return on an investment. This tutorial explains how to calculate the Sharpe Ratio.**

Online financial calculator to calculate the sharpe ratio value by entering the Expected portfolio return, Risk free rate & Portfolio standard deviation.

### Calculator of Sharpe Ratio

### Formula of Sharpe Ratio

**Sharpe Ratio = (Expected portfolio return – Risk free rate) / Portfolio standard deviation**

**Example of Sharpe Ratio**

A manager generates a return of 15% with the risk free-rate of 5%, and a manager’s portfolio has a standard deviation of 8%, then find the sharpe ratio for manager portfolio?

**Given**

Expected portfolio return= 15%, Risk free rate= 5% Portfolio standard deviation = 8%

**To Find**

S(x) – Sharpe Ratio

**Solution**

Substitute the given values in the formula,

S(x) | = | (Expected portfolio return – Risk free rate) / Portfolio standard deviation |

= | (15-5)/8 | |

= | (10)/8 | |

= | 1.25 |

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