Source: RBC Methodology and the Development of Aggregate Economic Theory Edward C. Prescott, Federal Reserve Bank of Minneapolis Staff Report 527 February 2016.
Source: The incidence of company tax in Australia, Xavier Rimmer, Jazmine Smith and Sebastian Wende, Australian Treasury working paper.
The Sharp ratio describes how much excess return you are receiving for the extra volatility that you endure for holding a riskier asset. If manager A generates a return of 15% while manager B generates a return of 12%, it would appear that manager A is a better performer. But if manager A took much larger risks than manager B, manager B may be a better risk-adjusted return.
Source:New Zealand Superannuation Fund response to Official Information Act request.