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Risk Adjust Rate
of Return (cont) |
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Despite these forms of arbitrage
being somewhat risky, they are still relatively
low-risk trading strategies which money managers
(mainly hedge fund managers) and retail investors
alike can employ. |
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Risk-Free Rate |
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The quoted rate on an asset that
has virtually no risk. The rate quoted for US treasury
bills are widely used as the ris k free rate. |
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Risk Reward Ratio |
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This is closely related to the
Sharpe Ratio, except the risk reward ratio does not use
a risk free rate in its calculation.The higher the risk
reward ratio, the better. |
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