The following data are available relating to the performance of Sooner Stock Fund and the market portfolio: $\begin{array}{lcc}
& \text { Sooner } & \text { Market } \
&&\text { Portfolio }\
\text { Average return } & 20 \% & 11\% \
\text { Standard deviations of returns } & 44\% & 19\% \
\text { Beta } & 1.8 & 1.0 \
\text { Residual standard deviation } & 2.0 \% & 0.0 \%
\end{array}$
The risk-free return during the sample period was 3%.
What is the Treynor measure of performance evaluation for Sooner Stock Fund?
A) 1.33%
B) 4.00%
C) 8.67%
D) 9.44%
E) 37.14%

Question

The following data are available relating to the performance of Sooner Stock Fund and the market portfolio: $\begin{array}{lcc} 
& \text { Sooner } & \text { Market } \
&&\text { Portfolio }\
\text { Average return } & 20 \% & 11\% \
\text { Standard deviations of returns } & 44\% & 19\% \
\text { Beta } & 1.8 & 1.0 \
\text { Residual standard deviation } & 2.0 \% & 0.0 \%
\end{array}$
 The risk-free return during the sample period was 3%.
What is the Treynor measure of performance evaluation for Sooner Stock Fund?
A) 1.33%
B) 4.00%
C) 8.67%
D) 9.44%
E) 37.14%

Quizplus · Accepted Answer

The Treynor measure is calculated as (Average return - Risk-free rate) / Beta. For Sooner Stock Fund, it is (20% - 3%) / 1.8 = 9.44%.

The Following Data Are Available Relating to the Performance of Sooner