## About Risk-adjusted Return Calculator (Formula)

The Risk-adjusted Return Calculator is a tool used to evaluate the return on an investment adjusted for the level of risk. It helps investors assess the performance of an investment by considering the risk involved and comparing it to a risk-free rate. The risk-adjusted return provides a measure of how well an investment performs relative to its risk.

**The formula used to calculate the risk-adjusted return is as follows:**

RAR = (IR – RFR) / STD

Where:

- RAR represents the risk-adjusted return.
- IR denotes the investment return.
- RFR refers to the risk-free return.
- STD represents the standard deviation, which measures the investment’s volatility.

To use the Risk-adjusted Return Calculator, input the values for the investment return (IR), risk-free return (RFR), and standard deviation (STD). After entering the values, click the “Calculate” button, and the calculator will apply the formula to calculate the risk-adjusted return. The result is displayed as “Risk-adjusted Return: [value]” with two decimal places.

By utilising the Risk-adjusted Return Calculator, investors can assess the performance of their investments while considering the level of risk involved. It helps in comparing different investment options and making informed decisions based on the risk-return trade-off.