The following data are available relating to the performance of Scooner Stock Fund and the market portfolio: $\begin{array}{lcc}
& \text { Scooner } & \text { Market } \
&&\text { Portfolio }\
\text { Average return } & 19 \% & 12\% \
\text { Standard deviations of returns } & 35\% & 15\% \
\text { Beta } & 1.5 & 1.0 \
\text { Residual standard deviation } & 3.0 \% & 0.0 \%
\end{array}$

The risk-free return during the sample period was 6%.
What is the Treynor measure of performance evaluation for Scooner Stock Fund?
A) 1.33%
B) 4.00%
C) 8.67%
D) 31.43%
E) 37.14%

Question

The following data are available relating to the performance of Scooner Stock Fund and the market portfolio: $\begin{array}{lcc} 
& \text { Scooner } & \text { Market } \
&&\text { Portfolio }\
\text { Average return } & 19 \% & 12\% \
\text { Standard deviations of returns } & 35\% & 15\% \
\text { Beta } & 1.5 & 1.0 \
\text { Residual standard deviation } & 3.0 \% & 0.0 \%
\end{array}$

The risk-free return during the sample period was 6%.
What is the Treynor measure of performance evaluation for Scooner Stock Fund?
A) 1.33%
B) 4.00%
C) 8.67%
D) 31.43%
E) 37.14%

Quizplus · Accepted Answer

The Treynor measure is calculated as (Average return of the portfolio - Risk-free rate) / Beta. For Scooner Stock Fund, it is (19% - 6%) / 1.5 = 13% / 1.5 = 8.67%.

The Following Data Are Available Relating to the Performance of Scooner