This Case is about Finance

Publication Date: 11/23/2011

In this note, several measures to assess the operation of a mutual fund are discussed, including Jensen’s Measure, Treynor Ratio, Sharpe Ratio, and Modigliani’s Measure. It is well known that expected returns can rise by assuming higher risk; therefore, performance measures must include the notion of danger.

Learning Objective: This note is useful for teaching common approaches in quantifying a mutual fund operation.

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