Performance Measures Flashcards
1
Q
Jensen’s alpha
A
Also known as Jensen’s Performance Index. Alpha measures the portfolio’s actual or realized return in excess of the expected return.
2
Q
Treynor Ratio
A
Uses Beta in it’s denominator and therefore may be used only to compare the performance of diversified portfolio of diversified portfolios or stocks that constitute diversified portfolios.
3
Q
Sharpe. Ratio
A
Uses standard deviation in its denominator and therefore is a catchall formula
4
Q
Sharpe Ratio
A
Uses standard deviation in its denominator and therefore is a catchall formula