Appraisal ratio

Appraisal ratio

The signal-to-noise ratio of an analyst's forecasts. The ratio of alpha to residual standard deviation.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Appraisal Ratio

A measure of a fund or portfolio's performance calculated by taking its alpha (a measure of the fund's return, assuming the market return is zero) and dividing by its unsystemic risk or standard deviation. Generally speaking, money managers use the appraisal ratio to measure the fund's performance relative to some benchmark. They may change the composition of funds and portfolios with suboptimal appraisal ratios.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
References in periodicals archive ?
He presents the weighted repeat sales method and sale price appraisal ratio (SPAR) method for constructing house price indexes in the Netherlands; explains the factors affecting development of house prices and a house price model; and discusses supply, the relationship between house prices and the business cycle, and economic growth and price quality.
They derive the mean--variance optimal portfolio in this case and show that the optimal deviations from the benchmark holdings for each security depend on the "Appraisal Ratio":
They employ two performance measures: the alpha and the appraisal ratio, with the latter measure being leverage-invariant.
The comparisons, together with the investor appraisal ratios (price/earnings, price/book value, and dividend yield) of the comparable companies' common shares, provide the basis for determing the hypothetical freely traded value of the company's stock.
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