The concept of riskadjusted return helps investors make informed decisions from "summary" of How Finance Works by Mihir Desai
Investors are faced with a myriad of choices when it comes to where to put their money. One key consideration in making these decisions is understanding the concept of risk-adjusted return. This concept allows investors to weigh the potential return of an investment against the level of risk involved. By taking into account the inherent risks of an investment, investors can make more informed decisions about where to allocate their funds. The idea behind risk-adjusted return is to evaluate how much return an investment is expected to generate relative to the level of risk it carries. This means that investors can compare investments on an apples-to-apples bas...
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