Asked by Kawinthida Kanajoth on Jun 07, 2024

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The following data are available relating to the performance of Wildcat Fund and the market portfolio:
The following data are available relating to the performance of Wildcat Fund and the market portfolio:   The risk-free return during the sample period was 7%. Calculate Treynor's measure of performance for Wildcat Fund. A)  0.01 B)  0.088 C)  0.44 D)  0.50 E)  0.61
The risk-free return during the sample period was 7%.
Calculate Treynor's measure of performance for Wildcat Fund.

A) 0.01
B) 0.088
C) 0.44
D) 0.50
E) 0.61

Treynor's Measure

A performance metric for determining how well an investment compensates the investor for taking a risk, considering the risk-free rate.

Risk-Free Return

The theoretical return on an investment with no risk of financial loss.

Wildcat Fund

A type of investment fund that takes on high-risk investments, hoping for significantly higher-than-average returns.

  • Learn about the range of measures for gauging performance (Sharpe, Treynor, Jensen's alpha, M2, and information ratio) and how they are determined.
  • Recognize the value of risk-free returns in the analysis of investment performance.
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ZK
Zybrea KnightJun 07, 2024
Final Answer :
B
Explanation :
(0.18 − 0.07)/1.25 = 0.088.