Suppose two portfolios have the same average return,the same standard deviation of returns,but Buckeye Fund has a higher beta than Gator Fund.According to the Treynor measure,the performance of Buckeye Fund
A)is better than the performance of Gator Fund.
B)is the same as the performance of Gator Fund.
C)is poorer than the performance of Gator Fund.
D)cannot be measured as there is no data on the alpha of the portfolio.
E)none of the above is true.

Question

Quizplus · Accepted Answer

The Treynor measure evaluates performance based on the risk taken, specifically market risk (beta). A higher beta implies higher market risk, so with the same return, Buckeye Fund's performance is poorer.

Suppose Two Portfolios Have the Same Average Return,the Same Standard