Episode
[Series 65] 45, Sharpe Treynor and Jensen Performance Measures
- Podcast
- Open Exam Prep
- Published
- May 8, 2026
- Duration seconds
- 222
- Processing state
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Summary
This podcast is made by Ran Chen, who holds an EA license, Insurance and Securities licenses (Series 6, 63, 65), and the CFP® designation. He is passionate about opening access to high-quality exam preparation resources and helping learners prepare more effectively for professional certification exams. In this episode you will learn: - The Sharpe Ratio uses standard deviation to measure return per unit of total risk, making it ideal for non-diversified portfolios. - The Treynor Ratio uses beta to measure return per unit of systematic risk, making it the correct choice for well-diversified portfolios. - Jensen's Alpha is a measure of a manager's skill, calculating the excess return a portfolio earned above its expected return based on its beta. - How the Series 65 exam tests these concepts conceptually, focusing on which measure is appropriate for a given scenario rather than complex calculations. - A simple mnemonic to remember the key risk component for each performance measure: Sharpe for Standard Deviation, Treynor for Beta, and Jensen for Genius (Alpha). For more free exam prep tools, practice questions, and AI-powered explanations, visit https://open-exam-prep.com/ or YouTube Channel: https://www.youtube.com/@Open-exam-prep