Asked by Tyler Evans on May 27, 2024
Verified
Suppose two portfolios have the same average return and the same standard deviation of returns, but Buckeye Fund has a higher beta than Husker Fund. According to the Treynor measure, the performance of Buckeye Fund
A) is better than the performance of Husker Fund.
B) is the same as the performance of Husker Fund.
C) is poorer than the performance of Husker Fund.
D) cannot be measured as there are no data on the alpha of the portfolio.
E) None of the options are correct.
Treynor Measure
A performance metric that evaluates the returns of an investment portfolio or fund relative to its market risk.
Standard Deviation
A statistical measure of the dispersion or variability of a set of data points or investment returns around the mean.
Beta
A quantification of the risk and fluctuations experienced by a security or portfolio when compared to the general market.
- Cultivate an understanding of the theoretical basis and calculation methodologies for risk-adjusted metrics, including the Treynor measure, Sharpe measure, and Jensen's alpha.
- Grasp the criticality and quantitative analysis of beta in measuring the performance of investment portfolios.
Verified Answer
Learning Objectives
- Cultivate an understanding of the theoretical basis and calculation methodologies for risk-adjusted metrics, including the Treynor measure, Sharpe measure, and Jensen's alpha.
- Grasp the criticality and quantitative analysis of beta in measuring the performance of investment portfolios.
Related questions
Suppose Two Portfolios Have the Same Average Return and the ...
________ Developed a Popular Method for Risk-Adjusted Performance Evaluation of ...
You Want to Evaluate Three Mutual Funds Using the Sharpe ...
The Following Data Are Available Relating to the Performance of ...
________ Did Not Develop a Popular Method for Risk-Adjusted Performance ...