The Pacific Fund earns 12.9% during the year while the risk-free rate is 4.2%. The Pacific...
The Pacific Fund earns 12.9% during the year while the risk-free rate is 4.2%. The Pacific Fund has a beta of 1.35 and a standard deviation of 18.7%. The Treynor Ratio is closest to:
a. 0.689
b. 9.555
c. 6.444
d. 0.465
Homework Answers
c.6.444
treynor ratio = (return on portfolio - risk free rate) / beta of portfolio
=> (12.9%-4.2%) / 1.35
=>8.7/1.35
=>6.444
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