What is the definition of a Sharpe Ratio?

The Share Ratio is a way to calculate the risk-adjusted-performance.   William Sharpe was the person that came up with that term and it's now widely used in finance. 

It is another way to assess whether the returns on a portfolio are a result of good investments or from speculating with large amounts of risk.

This means that an investment with a higher return for less risk will have a higher Sharpe Ratio than one with high levels of risk. Ideally an investor wants to have a portfolio with a high Sharpe Ratio.

This is how to calculate the Sharpe Ratio 

• ( Expected Portfolio Return - Risk-Free Rate ) / Portfolio Standard Deviation