Good financial advice would suggest that investors should examine returns by the amount of return per unit of risk accepted, rather than in isolation.

Question

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Examining returns by the amount of return per unit of risk accepted is a commonly used measure in finance known as the Sharpe ratio. This measure takes into account not just the return on investment, but also the amount of risk taken to achieve that return. This approach allows investors to compare different investment opportunities on a level playing field and make more informed decisions about where to invest their funds.

Good Financial Advice Would Suggest That Investors Should Examine Returns