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Risk-Adjusted Performance — How to Tell Skill from Luck

Fund A returned 18% and Fund B returned 12%. Which manager is better? If you answered "A," this session is for you. A high return means nothing until you know how much risk was taken to earn it. This week we build the three measures the industry uses to separate genuine skill from lucky risk-taking — Sharpe, Treynor, and Jensen's alpha — the exam-ready foundation every CFA Level 1 candidate needs.