Jensen's alpha
Jensen's alpha is a number that measures the vertical distance of a portfolio's return above or below the Security Market Line; first suggested by Professor Michael Jensen, it became popular because of its ease of calculation.
Definitions
According to Financial Management Theory and Practice by Eugene F. Brigham and Michael C. Ehrhardt (13th edition),
- Jensen's alpha. Measures the vertical distance of a portfolio's return above or below the Security Market Line; first suggested by Professor Michael Jensen, it became popular because of its ease of calculation.
Related concepts
- Financial management. A combination of enterprise efforts undertaken in order to procure and utilize monetary resources of the enterprise.
