A portfolio has a total return of 10.5%, a beta of 0.72 and a standard deviation of 6.3%. The risk-free rate is 3.8%, the market return is 12.4%. Jensen's measure of this portfolio's performance is

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Jensen's measure (alpha) is calculated as: Alpha = Portfolio Return - [Risk-Free Rate + Beta * (Market Return - Risk-Free Rate)]. Substituting the given values: Alpha = 10.5% - [3.8% + 0.72 * (12.4% - 3.8%)] = 0.5%.

A Portfolio Has a Total Return of 10