A Jensen measure of 2.5% means that a security earned 2.5% more than the overall market.

Name: A Jensen measure of 2.5% means that a security earned 2.5% more than the overall market.
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Question

Quizplus · Accepted Answer

A Jensen measure of 2.5% means that a security earned 2.5% more than what would be predicted by the Capital Asset Pricing Model (CAPM), taking into account the security's beta and the overall market return, not simply 2.5% more than the overall market.

A Jensen Measure of 2