Financial Planner

Answer: D - For a complete picture of a fund's performance risk and return must be calculated by the Treynor, Sharpe, and Jensen indexes. These three composite performance measures combine risk and retune to give quantifiable risk-adjusted numbers. Investors can use these measures together to determine whether a portfolio or fund manager actually beat the market. In the simplest way, the risk-adjusted return is calculated by taking the rate of return of a stock or portfolio and dividing it by some risk measure, such as standard deviation or beta.