Sharpe Ratio calculation

Hello All,

When calculating the Sharpe ratio we use :

  1. Portfolio Return, 2) Risk Free and 3) Standard Deviation of portfolio returns. Reading other literature I found that SD is calculated with Portfolio Excess Returns over the Risk free is this correct?

If the risk-free rate is constant, the standard deviation of the portfolio returns is the same as the standard deviation of the portfolio’s excess returns over the risk-free rate.