n NISM Certifications
X NISM Series X
Medium

Calculate the Beta of a portfolio if the Treynor’s Ratio is 0.07, the Risk-Free Rate is 6%, and the portfolio return is 14%.

Practice question from NISM Series XA- Investment Adviser (Level 1) Mock Test 4 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    Cannot be calculated with the given data

  2. 1.14

    Correct answer

  3. C

    0.78

  4. D

    1.88

Why this is the answer

Using Treynor Ratio = (Return – Risk-Free Rate) / Beta, Beta = (0.14 – 0.06) / 0.07 = 0.08 / 0.07 ≈ 1.14.

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