The Sharpe Ratio measures risk-adjusted performance. It's calculated by subtracting the risk-free interest rate from the rate of return for a specific fund, and dividing the result by the standard deviation of the fund returns. We use the G Fund as our risk-free investment in Sharpe Ratio ...
For example, the TSP G Fund interest rate has fluctuated between 0.675% and 9.625%, but the types of U.S. bonds included in the F Fund have historically had interest rates over 15%! Credit risk: a company or government's credit quality could wane, and you (as a bondholder) could ...