Phil has a portfolio with a 13.2% total return. The beta of the portfolio is 1.48 and the standard deviation is 13%. Currently, the risk-free rate of return is 4% and the overall market has a total return of 11%. What is the value of Treynor's measure for Phil's portfolio?
A) 2.1%
B) 6.2%
C) 7.1%
D) 8.9%

Question

Quizplus · Accepted Answer

Treynor's measure is calculated as (Portfolio return - Risk-free rate) / Beta. For Phil's portfolio, it would be (13.2% - 4%) / 1.48 = 6.2%.

Phil Has a Portfolio with a 13