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AAFM Exam CWM_LEVEL_2 Topic 5 Question 75 Discussion

Actual exam question for AAFM's CWM_LEVEL_2 exam
Question #: 75
Topic #: 5
[All CWM_LEVEL_2 Questions]

Section C (4 Mark)

Consider the following information for three mutual funds:

Market Return 10%

Risk free return is 7%.

Calculate Jensen measure (%).

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Suggested Answer: C

by Clorinda at Apr 20, 2024, 12:54 AM

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Whitney
3 days ago
Ugh, this question is giving me a headache. I'm just going to close my eyes and randomly select an answer. Maybe I'll get lucky and guess the right one. Eeny, meeny, miny, moe...
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Lang
6 days ago
Wait, wait, wait. Something's not right here. I'm getting different numbers than option A. Let me double-check my work. Ah, got it! The correct answer is option B. Easy peasy!
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Lettie
11 days ago
Hmm, I think I got it. The Jensen measure for each fund is 1.70, 5.30, and 3.40. Looks like option A is the correct answer. This is a piece of cake!
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Adelina
13 days ago
Okay, let's see. I need to calculate the Jensen measure for each mutual fund. The formula is Jensen measure = (fund return - risk-free return) / (market return - risk-free return). Time to plug in the numbers!
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Felix
13 days ago
So, for the first mutual fund, the Jensen measure would be 1.70?
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Brandon
19 days ago
Yes, that's correct. It measures the excess return of a portfolio over the risk-free rate.
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Felix
23 days ago
I think the Jensen measure is calculated by subtracting the risk-free rate from the actual return.
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