Consider the Treynor-Black Model

question 30

Multiple Choice

Consider the Treynor-Black model. The alpha of an active portfolio is 2%. The expected return on the market index is 16%. The variance of return on the market portfolio is 4%. The nonsystematic variance of the active portfolio is 1%. The risk-free rate of return is 8%. The beta of the active portfolio is 1. The optimal proportion to invest in the active portfolio is

• A) 0%.
• B) 25%.
• C) 50%.
• D) 100%.

---

Definitions:

Audience-centered

Refers to a communication approach that tailors the message based on the audience's needs, interests, and expectations.

Team-centered

An approach or strategy that prioritizes the involvement and contribution of all team members in achieving collective goals.

Message-centered

Focused on the content or information being communicated.

Chronological Organization

An organizational method that arranges information or events in the order they occurred in time.