Sharpe's measure is a ratio of excess return to the standard deviation of the portfolio.

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Sharpe's measure, also known as the Sharpe ratio, calculates the performance of an investment compared to a risk-free asset, after adjusting for its risk. It is defined as the difference between the returns of the investment and the risk-free return, divided by the standard deviation of the investment returns, thus providing a ratio of excess return to risk.

Sharpe's Measure Is a Ratio of Excess Return to the Standard