Are you happy with the risk-adjusted portfolio performance

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Reference no: EM132070061

You just received your annual performance statement from your investment advisor.

The statement indicates that your portfolio return for the past year was up 25%. In addition, you noticed, within the statement, that the S&P rose 18%.

Also, the statement reflected that your portfolio had a beta of 1.25. Further on, you noticed that the risk-free rate of return was 1%. To your dismay, the statement did not provide what the risk-adjusted rate of return was for the year.

Therefore, you called your investment advisor for a clarification. The investment advisor provides you with the risk-adjusted rate of return.

Are you happy with the risk-adjusted portfolio performance? Explain fully. What is the portfolio's Jensen Measure?

Reference no: EM132070061

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