Which portfolio(s) should you add to a master portfolio using the Treynor ratio?
Refer: To: 13-72
A) A only
B) D only
C) A and B
D) A and C
E) B and D

Question

Quizplus · Accepted Answer

The Treynor Ratio measures the returns earned in excess of the risk-free rate per unit of market risk. You should add portfolios with the highest Treynor Ratios to a master portfolio because they offer the best compensation for the risk taken. Without specific values or additional context, the correct choice cannot be determined based on the information provided. However, assuming the question implies that portfolios A and C have higher Treynor Ratios, they would be the correct choices to add to a master portfolio for maximizing risk-adjusted returns.

Which Portfolio(s) Should You Add to a Master Portfolio Using