Part 9/11:

The Metrics of Deceit

Key metrics were examined, such as:

• Annual Returns: Madoff's claimed returns were consistently higher than both the S&P 500 and any legitimate variant of the split-strike conversion strategy, even though his stability was mathematically untenable.

• Risk Volatility: The volatility of Madoff’s reported returns was almost non-existent, an anomaly in the highly unpredictable nature of stock markets where losses are a natural occurrence.

• Sharpe Ratio: Madoff’s Sharpe ratio, signifying exorbitant returns for negligible risk, surpassed norms significantly, creating substantial skepticism about the legitimacy of his investment strategy.