Enter the average excess returns over the period ($) and the standard deviation of the returns into the Calculator. The calculator will evaluate the Modigliani Ratio.

## Modigliani Ratio Formula

MR = AER / SD

Variables:

- MR is the Modigliani Ratio ()
- AER is the average excess returns over the period ($)
- SD is the standard deviation of the returns

To calculate Modigliani Ratio, divide the excess return of the period by the standard deviation of the returns.

## How to Calculate Modigliani Ratio?

The following steps outline how to calculate the Modigliani Ratio.

- First, determine the average excess returns over the period ($).
- Next, determine the standard deviation of the returns.
- Next, gather the formula from above = MR = AER / SD.
- Finally, calculate the Modigliani Ratio.
- After inserting the variables and calculating the result, check your answer with the calculator above.

**Example Problem : **

Use the following variables as an example problem to test your knowledge.

average excess returns over the period ($) = 500

standard deviation of the returns = 2.5