Which measure would you use to know whether alpha is truly significant or the result of random chance?
A)Jensen's alpha
B)information ratio
C)Jensen-Treynor alpha
D)Sharpe ratio
E)Treynor ratio

Question

Quizplus · Accepted Answer

The information ratio measures the consistency of a portfolio manager's ability to generate excess returns over a benchmark, adjusted for risk, and helps determine if alpha is significant or due to random chance.

Which Measure Would You Use to Know Whether Alpha Is