Asked by Kawinthida Kanajoth on Jun 07, 2024
Verified
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
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.
Verified Answer
ZK
Learning Objectives
- 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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