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sum of capita from her mother when she passed away. She wanted it to be invested and
managed by investment management professional who she could have direct contact
with. Riya was adamant that she did not want to leave the capital as cash in a bank
account that was providing a poor level of interest.
Beta
Beta measures the volatility of a fund in comparison to the market or the
selected benchmark index. A beta of one indicates the fund is expected to
move in conjunction with the benchmark. Betas below one are considered less
volatile than the benchmark, while those over one are considered more volatile
than the benchmark.
R-Squared
R-Squared measures the percentage of an investment's movement attributable
to movements in its benchmark index. An R-squared value represents the
correlation between the examined investment and its associated benchmark.
For example, an R-squared value of 95 would be considered to have a high
correlation, while an R-squared value of 50 may be considered low.
Standard Deviation
Standard deviation is a method of measuring data dispersion in regards to the mean
value of the dataset and provides a measurement regarding an investment’s volatility.
Sharpe Ratio
The Sharpe ratio measures performance as adjusted by the associated risks. This is
done by removing the rate of return on a risk-free investment, such as a U.S. Treasury
Bond, from the experienced rate of return.
This is then divided by the associated investment’s standard deviation and serves as
an indicator of whether an investment's return is due to wise investing or due to the
assumption of excess risk.
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