What is the Treynor measure of performance evaluation for The Carlyte Group?

Question

Quizplus · Accepted Answer

The Treynor measure is a performance metric that evaluates the excess returns of a security or portfolio compared to that of a risk-free asset, adjusted for systematic risk.

The formula for the Treynor measure is:
(Total Portfolio Return - Risk-Free Rate) / Beta

Using the given data, we can calculate the Treynor measure for The Carlyle Group as:
(16.5% - 2.5%) / 1.3 = 10%

Therefore, the correct choice is C, which corresponds to a Treynor measure of 8.67% (the closest option). This result indicates that The Carlyle Group has generated excess returns over the risk-free rate for every unit of systematic risk, which is a positive performance indicator.

What Is the Treynor Measure of Performance Evaluation for the Carlyte