ELI5: Explain Like I'm 5

Bias ratio (finance)

Bias ratio is a way of measuring how risky an investment is. It compares how much money an investor could make (potential profit) to how much money they could lose (potential loss). Basically it helps an investor figure out if an investment is a good one. It’s like a ratio: one side is how much money you could make if everything goes well, while the other side is how much money you could lose if things don’t work out. If the ratio is high, that means there is a lot of potential to make money, but also a lot of risk. If the ratio is low, then there is less potential to make money, but also less risk.