The Jensen Portfolio Evaluation Measure

question 23

Multiple Choice

The Jensen portfolio evaluation measure

• A) is a measure of return per unit of risk, as measured by standard deviation.
• B) is an absolute measure of return over and above that predicted by the CAPM.
• C) is a measure of return per unit of risk, as measured by beta.
• D) is a measure of return per unit of risk, as measured by standard deviation, and is an absolute measure of return over and above that predicted by the CAPM.
• E) is an absolute measure of return over and above that predicted by the CAPM, and is a measure of return per unit of risk, as measured by beta.

---

Definitions:

Social Desirability Bias

The tendency of survey respondents to answer questions in a manner that will be viewed favorably by others, often leading to overreporting of positive behaviors and underreporting of negative behaviors.

Response Sets

Response sets refer to a pattern of responding to questions in a particular way irrespective of the content, often leading to biased outcomes in surveys or psychological tests.

Deliberate Deception

Intentionally misleading or lying to others, often to gain a personal advantage or to manipulate a situation.

Self-Actualization

Achieving one's natural talents and potential, conceived as an inborn yearning or necessity for everyone.