"I firmly believe that if you buy a stock at a low price, it's likely to produce above-average risk-adjusted returns," he said.

What kind of risk-adjusted returns should a stock have if it were, in fact, acting "efficiently"?

It measures the risk-adjusted return of an investment asset, portfolio or strategy.

"They want to own shares in the banking company that is going to provide them with the best risk-adjusted return on their capital."

"Investors don't focus enough on risk-adjusted return," he added.

What other markets are giving a better risk-adjusted return?

Such information, though, seems important to investors, who have been pouring money into funds with good marks for risk-adjusted returns.

And that is very likely to cause portfolios of male-managed funds to have lower average risk-adjusted returns.

The market model uses statistical methods to predict the appropriate risk-adjusted return of an asset.

It only attempts to maximize risk-adjusted returns, without regard to other consequences.