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.

1. First, determine the average excess returns over the period ($). 2. Next, determine the standard deviation of the returns. 3. Next, gather the formula from above = MR = AER / SD. 4. Finally, calculate the Modigliani Ratio. 5. After inserting the variables and calculating the result, check your answer with the calculator above. Example Problem : Use the following variables as an example problem to test your knowledge. average excess returns over the period ($) = 500

standard deviation of the returns = 2.5