CFA CFA Level 1 CFA Level 1 Question of the Week – Portfolio Management

CFA Level 1 Question of the Week – Portfolio Management

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    • Matt_AnalystPrep
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      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)
    • Matt_AnalystPrep
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      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.

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