The following data are available relating to the performance of Sooner Stock Fund and the market portfolio:

The risk-free return during the sample period was 3%.
Calculate the Jensen measure of performance evaluation for Sooner Stock Fund.
A) 2.6%
B) 4.00%
C) 8.67%
D) 31.43%
E) 37.14%

Question

The following data are available relating to the performance of Sooner Stock Fund and the market portfolio:

The risk-free return during the sample period was 3%.
Calculate the Jensen measure of performance evaluation for Sooner Stock Fund.
A) 2.6% 
B) 4.00% 
C) 8.67% 
D) 31.43% 
E) 37.14%

Quizplus · Accepted Answer

α_P = 20% - [3% + 1.8(11% - 3%)] = 2.6%.

The Following Data Are Available Relating to the Performance of Sooner