# » Jensen&#039;s alpha Calculator

## Initial Data

Annual return on investment (ri)
%
Risk-free interest rate (rf)
%
Beta of the portfolio (βi)
Annual return of the market benchmark (rm)
%

Jensen's alpha:
%

## Jensen's alpha

Jensen's alpha is used to determine the abnormal return of a security or portfolio of securities over the theoretical expected return.

$$\alpha_{J}=r_{i}-\left [ r_{f}+\beta_{iM} \times (r_{M}-r_{f})\right ]$$