Explanation:

• Option A (M-squared): Incorrect because M-squared adjusts portfolio returns for total risk relative to a benchmark, not just systematic risk.

• Option B (Sharpe ratio): Incorrect because the Sharpe ratio is derived from total risk, which is applicable for undiversified portfolios but not ideal for evaluating performance based solely on systematic risk.

• Option C (Jensen's alpha): Correct because Jensen's alpha specifically measures performance based on systematic risk. It calculates the difference between the actual portfolio return and the risk-adjusted return, providing a metric relative to the market portfolio.