Module 10 of 12 · 20 min

Return, risk and performance

Read the numbers without being fooled. Everything here is free. Work through the lessons in order, or jump to the one you need.

What you will cover

1. 1 How returns are measuredtrickiest The ways a return is quoted, absolute, CAGR, and XIRR for SIPs, how to compute them, and why the total return index is the fair yardstick. ⏱ 8 min · 5 practice Q →
2. 2 Measuring risktrickiest The two numbers the exam uses to measure a fund's risk, standard deviation (total swing) and beta (swing versus the market), with what the numbers mean. ⏱ 7 min · 4 practice Q →
3. 3 Return for the risk takentrickiest Why a return only means something next to the risk taken and the benchmark, the Sharpe and Treynor ratios and alpha, with how each is worked out. ⏱ 8 min · 5 practice Q →
4. 4 Reading performance well How to judge a fund's track record without being fooled by a hot year. ⏱ 5 min · 3 practice Q →
5. 5 Benchmarks and comparing performance What a benchmark is, why funds use a Total Return Index, the two-tier benchmark system, and how to compare a scheme fairly against its index and peers. ⏱ 7 min · 4 practice Q →