What are the key components of the Jensen measure formula and how do they contribute to assessing the risk-adjusted returns of cryptocurrencies?

1 answers

• Apr 29, 2022 · 3 years ago
  The Jensen measure formula is a widely used method for evaluating the risk-adjusted returns of cryptocurrencies. It consists of three main components: the expected return of the cryptocurrency, the risk-free rate of return, and the beta coefficient. The expected return represents the anticipated performance of the cryptocurrency, taking into account market conditions and historical data. The risk-free rate of return serves as a benchmark for comparing the cryptocurrency's performance to a risk-free investment. The beta coefficient measures the cryptocurrency's sensitivity to market movements. By analyzing these components, the Jensen measure formula provides a way to assess the risk-adjusted returns of cryptocurrencies, helping investors make informed decisions about their investments.
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