Q » Define Treynor ratio.

Steven

06 Dec, 2025

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A » The Treynor ratio is a financial metric that evaluates the excess return per unit of risk taken, where risk is measured by beta, a measure of market volatility. It is calculated by subtracting the risk-free rate from the portfolio return and dividing the result by the portfolio's beta. This ratio helps investors understand how well their investment compensates for market risk, guiding informed decisions in portfolio management.

Michael

06 Dec, 2025

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A »The Treynor ratio is a risk-adjusted performance metric that measures the excess return of a portfolio over the risk-free rate, relative to its systematic risk (beta). It's calculated as (portfolio return - risk-free rate) / beta. For example, if a portfolio returns 10%, the risk-free rate is 2%, and beta is 1.2, the Treynor ratio is (0.10 - 0.02) / 1.2 = 0.0667.

Ronald

06 Dec, 2025

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A »The Treynor ratio is a financial metric that measures the excess return per unit of systematic risk in a portfolio. It is calculated by subtracting the risk-free rate from the portfolio's return and dividing the result by the portfolio's beta. This ratio helps investors understand how well a portfolio compensates for market risk, with a higher Treynor ratio indicating better risk-adjusted performance.

Edward

06 Dec, 2025

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A »The Treynor ratio is a risk-adjusted performance metric that measures the excess return of a portfolio over the risk-free rate, relative to its systematic risk, as represented by beta. It helps investors evaluate a portfolio's performance by comparing its returns to the risk taken, with higher ratios indicating better risk-adjusted performance.

Charles

06 Dec, 2025

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A »The Treynor ratio measures a portfolio's excess return per unit of systematic risk. It's calculated by subtracting the risk-free rate from the portfolio's return and dividing by its beta. For example, if a portfolio returns 12%, the risk-free rate is 2%, and the beta is 1.5, the Treynor ratio is (12% - 2%) / 1.5 = 6.67. A higher Treynor ratio indicates better risk-adjusted performance.

Anthony

06 Dec, 2025

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A »The Treynor ratio is a risk-adjusted performance metric that measures the excess return of an investment per unit of systematic risk taken, calculated as (portfolio return - risk-free rate) / beta. It helps investors evaluate an investment's return relative to its market risk.

Matthew

06 Dec, 2025

0 | 0

A »The Treynor ratio is a financial metric used to assess the risk-adjusted return of an investment portfolio. It measures the returns earned above the risk-free rate, relative to the portfolio's systematic risk, represented by its beta. A higher Treynor ratio indicates a more favorable risk-adjusted return, suggesting efficient portfolio management in relation to market-wide risks. This ratio is particularly useful for comparing portfolios with similar market exposure.

Daniel

06 Dec, 2025

0 | 0

A »The Treynor ratio is a risk-adjusted performance metric that measures the excess return of a portfolio over the risk-free rate, relative to its systematic risk (beta). It's calculated as (portfolio return - risk-free rate) / beta. For example, if a portfolio returns 10%, the risk-free rate is 2%, and beta is 1.2, the Treynor ratio is (0.10 - 0.02) / 1.2 = 0.0667.

Christopher

06 Dec, 2025

0 | 0

A »The Treynor Ratio measures a portfolio's excess return per unit of systematic risk, using beta as a risk indicator. It helps investors evaluate how well a diversified portfolio compensates for market risk. Calculated by subtracting the risk-free rate from the portfolio's return, then dividing by the portfolio's beta, it provides insights into the risk-adjusted performance compared to market volatility.

Joseph

06 Dec, 2025

0 | 0

A »The Treynor ratio is a risk-adjusted performance metric that measures the excess return of a portfolio over the risk-free rate, relative to its systematic risk (beta). It is calculated as (portfolio return - risk-free rate) / beta. A higher Treynor ratio indicates better risk-adjusted performance, helping investors evaluate portfolio managers' effectiveness in generating returns relative to market risk.

William

06 Dec, 2025

0 | 0

A »The Treynor ratio measures a portfolio's excess return per unit of systematic risk, represented by beta. It's calculated as (Portfolio Return - Risk-Free Rate) / Beta. For example, if a portfolio returns 10%, the risk-free rate is 2%, and the portfolio's beta is 1.5, the Treynor ratio is (10% - 2%) / 1.5 = 5.33. A higher ratio indicates better risk-adjusted performance.

James

06 Dec, 2025

0 | 0