A Portfolio Has an Expected Return of 13

question 68

Multiple Choice

A portfolio has an expected return of 13.8%, a beta of 1.14, and a standard deviation of 12.7%. The U.S. Treasury bill rate is 3.2%. What is the Treynor ratio?

• A).093
• B).138
• C).146
• D).835
• E).951

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Definitions:

Weighted Average Cost of Capital (WACC)

A calculation of a company's cost of capital, weighted by the proportion of each source of capital (debt and equity), used to see how much interest the company pays for every dollar it finances.

Cost of Preferred Stock

The dividend required to be paid by an entity for the funds received from issuing preferred shares, typically expressed as a percentage.