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During the year just ended, Anna Schultzs portfolio, which has a beta of 0.90, earned a return of 8.6%. The

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During the year just ended, Anna Schultz’s portfolio, which has a beta of 0.90, earned a return of 8.6%. The risk-free rate is currently 7.3%, and the return on the market portfolio during the year just ended was 9.2%.
a. Calculate Treynor’s measure for Anna’s portfolio for the year just ended.
b. Compare the performance of Anna’s portfolio found in part a to that of Stacey Quant’s portfolio, which has a Treynor’s measure of 1.25%. Which portfolio performed better? Explain.
c. Calculate Treynor’s measure for the market portfolio for the year just ended.
d. Use your findings in parts a and c to discuss the performance of Anna’s portfolio relative to the market during the year just ended.
Portfolio
A portfolio is a grouping of financial assets such as stocks, bonds, commodities, currencies and cash equivalents, as well as their fund counterparts, including mutual, exchange-traded and closed funds. A portfolio can also consist of non-publicly...

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Fundamentals of Investing

Fundamentals of Investing

ISBN: 978-0133075359

12th edition

Authors: Scott B. Smart, Lawrence J. Gitman, Michael D. Joehnk

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Question Posted: April 28, 2015 03:51:22
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