The Jensen Measure Requires That Each Period's Rates of Return

question 52

True/False

The Jensen measure requires that each period's rates of return and risk-free rate be measured, rather than using the long-term averages as in the Treynor and Sharpe measures.

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Definitions:

Negative Correlation

A linkage between two variables that demonstrates an inverse relationship: one rises as the other falls.

Correlational Research

A research method that examines the relationship between two or more variables to determine if they are associated.

Prediction

The act of making statements or claims about events that will happen in the future based on past and present information or data.

Normal Curve

A symmetrical, bell-shaped curve that describes the distribution of many types of data where most of the observations cluster around the mean.