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Basic Question 0 of 18
Which statement is true regarding M-squared?
B. A portfolio with a M-squared of 0.5 underperforms the market.
A. It should give us portfolio rankings that are identical to those of the Sharpe ratio.
B. A portfolio with a M-squared of 0.5 underperforms the market.
User Contributed Comments 1
| User | Comment |
|---|---|
| khalifa92 | M^2 = adjusted portfolio returns to market risk - market return = positive (negative) outperform (underperform). |
I just wanted to share the good news that I passed CFA Level I!!! Thank you for your help - I think the online question bank helped cut the clutter and made a positive difference.
Edward Liu
Learning Outcome Statements
calculate and interpret the Sharpe ratio, Treynor ratio, M2, and Jensen's alpha
CFA® 2025 Level I Curriculum, Volume 2, Module 2.