Portfolio Management Q126

126Carlos wants to evaluate the performance of his portfolio manager. He wants to use a measure based on systematic risk and one which does not require a comparison to determine whether the performance is good or not. Which of the following measures is he most likely to use?

Option : A
Explanation : Jensen’s alpha is based on systematic risk and does not require a comparison. M-squared is based on total risk (not systematic risk). The Treynor ratio is based on systematic risk but requires a comparison.

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