USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)
The data presented below has been collected at this point in time.

-Refer to Exhibit 18.5. Compute the Treynor Measure for the ZZZ fund.
A) 6.98
B) 2.35
C) 2.53
D) 3.86
E) 1.72

Question

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)
The data presented below has been collected at this point in time.
 
-Refer to Exhibit 18.5. Compute the Treynor Measure for the ZZZ fund.
A) 6.98 
B) 2.35 
C) 2.53 
D) 3.86 
E) 1.72

Quizplus · Accepted Answer

The Treynor Measure is calculated as the ratio of the excess return of the fund to the beta of the fund. The excess return of the ZZZ fund is 10% - 5% = 5%. The beta of the ZZZ fund is 1.2. Therefore, the Treynor Measure for the ZZZ fund is 5% / 1.2 = 4.17%.