The correct answer is C. Jensen’s alpha.
Jensen’s alpha is a measure of the performance of an investment relative to a benchmark. It is calculated by regressing the excess returns of an investment on the excess returns of the benchmark. The intercept of this regression is Jensen’s alpha.
A positive Jensen’s alpha indicates that the investment has outperformed the benchmark, while a negative Jensen’s alpha indicates that the investment has underperformed the benchmark.
Sharpe’s ratio is a measure of the risk-adjusted return of an investment. It is calculated by dividing the excess returns of an investment by the standard deviation of its returns.
Tenor’s reward to variability ratio is a measure of the risk-adjusted return of an investment over a given tenor. It is calculated by dividing the excess returns of an investment over the tenor by the standard deviation of its returns over the tenor.
Tenor’s variance to volatility ratio is a measure of the volatility of an investment over a given tenor. It is calculated by dividing the variance of the returns of an investment over the tenor by the standard deviation of its returns over the tenor.