n NISM Certifications
X NISM Series X
Medium

What is the Treynor Ratio for a scheme with a return of 10%, risk-free rate of 7.5%, and beta of 0.5?

Practice question from NISM Series XB- Investment Adviser (Level 1) Mock Test 3 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    3%

  2. 5%

    Correct answer

  3. C

    7.5%

  4. D

    10%

Why this is the answer

Treynor Ratio = (Return - Risk-free rate) / Beta = (10 - 7.5) / 0.5 = 5%.

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