Which of the following is most likely the intercept of the security characteristics line (SCL)? A. Jensen's alpha B. Beta C. M-Squared (M2)

The correct answer is A. The security characteristic line (SCL) is a regression line, plotting performance of a particular security or portfolio against that of the market portfolio at every point in time. The slope of the SCL is the beta, and the intercept is its Jensen's alpha.

CFA Level 1 Question Of The Week - Portfolio Management (8) - CFA Level 1

Add A Reply

This topic has 1 reply, 1 voice, and was last updated Jul-199:41 pm by Matt_AnalystPrep.

Author

Posts
- Matt_AnalystPrep
  Participant
  - CFA Charterholder
  03 Jul 2019 at 9:41 pm
  Up
  2
  ::
  The correct answer is A.
  
  The security characteristic line (SCL) is a regression line, plotting performance of a particular security or portfolio against that of the market portfolio at every point in time. The slope of the SCL is the beta, and the intercept is its Jensen’s alpha.
Author

Posts

Viewing 0 reply threads

You must be logged in to reply to this topic.