Modigliani risk-adjusted performance

Modigliani risk-adjusted performance is a way of measuring how well an investment has performed while taking into account how much risk was involved. It's named after a man named Franco Modigliani, who was a really smart economist.

Think of it like playing a game of catch with your friend. If you're standing really far apart, it's harder to catch the ball and there's a higher chance you might drop it. But if you stand closer together, it's easier to catch the ball and less likely you'll drop it.

Similarly, when you invest your money, you're taking on risk. Some investments are riskier than others. Modigliani risk-adjusted performance looks at how well your investment did based on how much risk you took on. So if you took on a lot of risk, but still made a lot of money, then your investment would have a good Modigliani risk-adjusted performance.

In short, Modigliani risk-adjusted performance is a way to measure how well your investment did after taking into account how much risk you had to take on to get there. It's like playing catch, but with your money!