n NISM Certifications
XXI NISM Series XXI-A
Medium

The term 'Alpha' in investment performance refers to:

Practice question from NISM XXI A for PMS - Mock Test 5 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. The excess return over the benchmark risk-adjusted return

    Correct answer

  2. B

    The total return of a portfolio

  3. C

    The beta of a security

  4. D

    The risk-free rate of return

Why this is the answer

Alpha measures the value added by a portfolio manager relative to a benchmark after adjusting for risk.

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