A portfolio has a total return of 14.4%, a standard deviation of 18.5% and a beta of 1.43. The risk free rate is 2.5%, the market rate of return is 11.4%, and the market's Treynor measure is 6.3. What is the value of the Treynor measure of this portfolio?
A) -1.9%
B) .63 %
C) 8.32%
D) 27.4%

Question

Quizplus · Accepted Answer

The Treynor measure is calculated as (Portfolio Return - Risk-Free Rate) / Portfolio Beta. For this portfolio, it would be (14.4% - 2.5%) / 1.43 = 11.9% / 1.43 = 8.32%.

A Portfolio Has a Total Return of 14