What Is the Treynor Ratio of a Portfolio Comprised of 40

question 7

Multiple Choice

What is the Treynor ratio of a portfolio comprised of 40 percent portfolio A,25 percent portfolio B,and The risk-free rate is 2.5 percent and the market risk premium is 8.4 percent.

• A) 0.057
• B) 0.063
• C) 0.076
• D) 0.081
• E) 0.094

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Definitions:

Profitability

The ability of a business to generate more revenue than the expenses incurred, resulting in a profit.

Manufacturing Capacity

The maximum amount of products a factory or production facility can produce within a given time period.

Inventory Costs

Expenses associated with holding and managing goods or materials until they are sold or used in production.

Predictable Variability

Variations in demand, supply, or processes that can be anticipated and planned for based on historical data or trends.