Interesting Sharpe Ratio statement

from video:

Sharpe ratio is telling you the number of standard deviations the expected return is from the risk-free rate.

The greater the number of standard deviations you are from that risk free the lower the probability you will have a return as low as the RF rate.

Literal definition of what Sharpe ratio is calculating.

Had no idea till i heard this. i just knew we wanted a high sharpe ratio.

Whose video?

so youre telling me if std dev increases sharpe will fall? no way

That’s not remotely what he’s telling you.

enlighten me s2k

I have no idea why I wrote that.

Blame Mingus: one of the kittens my wife bought.

Yes, if the standard deviation of returns increases (with the mean return and the risk-free rate remaining unchanged), the Sharpe ratio decreases. What’s surprising about that?

Schweser cfa level 3 video by…crap forgot the name. great instructor.

David Hetherington?

Marc Lefevre?

Greg Filbeck?

Hetherington is a beast!!!

I’ve had the pleasure of working with David Hetherington at Stalla and at Schweser; he’s an excellent instructor.

yup - david heterington!

I think it’s more so saying by increasing risk you’re more likely to earn a return in excess of the risk-free rate.

Dispersion around the Rf is higher as you increase risk (standard deviation)