In the Treynor-Black model,the active portfolio will contain stocks with __________.
A) alphas equal to zero
B) negative alphas
C) positive alphas
D) some negative and some positive alphas

Question

Quizplus · Accepted Answer

The Treynor-Black model is based on the idea of creating an efficient portfolio by combining the market portfolio with an actively managed portfolio. The active portfolio aims to outperform the market portfolio by selecting stocks with positive alphas (risk-adjusted returns above their expected returns). Therefore, the active portfolio will contain stocks with positive alphas, making choice C the best answer.

In the Treynor-Black Model,the Active Portfolio Will Contain Stocks with __________