The Treynor-Black model is a model that shows how an investment manager can use security analysis and statistics to construct
A)a market portfolio.
B)a passive portfolio.
C)an active portfolio.
D)an index portfolio.

Question

Quizplus · Accepted Answer

The Treynor-Black model is used to construct an active portfolio. It combines security analysis with statistical analysis to create a portfolio that aims to outperform the market. The other choices (A, B, and D) are not directly related to the Treynor-Black model. A market portfolio is a portfolio that contains all the securities in the relevant market, a passive portfolio is a portfolio that seeks to replicate the performance of a specific index or benchmark, and an index portfolio is a type of passive portfolio that tracks an index.

The Treynor-Black Model Is a Model That Shows How an Investment