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The Sharpe ratio, Treynor measure, the M2 measure and Jensen’s Alpha techniques all measure the risk/return performance of portfolios. Which of the following statements about these measurement techniques is least accurate? A. Using the capital market line the M2 compares the account's return to the market return and is a comparative measure. B. The Sharpe ratio measures the slope of the capital allocation line (CAL), with the lowest slope having the most desirable risk/return combination. C. While the Treynor measure computes excess return per unit of risk, Jensen's Alpha measures differential return for a given level of risk. |