# Risk-reward ratio

(redirected from*Risk-Reward Ratios*)

## Risk-reward ratio

Relationship of substantial reward corresponding to the amount of risk taken; mathematically represented by dividing the expected return by the standard deviation.

## Risk-Reward Ratio

The ratio of the standard deviation of an investment to its expected return. The higher the ratio is, the lower the return for the amount of risk one is taking. This can inform one's investment decisions. See also: Risk adjusted return on capital.

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