# Treynor Index.

The Treynor Index is a measure of the risk-adjusted return on an investment. It is calculated by dividing the excess return of the investment over the risk-free rate by the beta of the investment. The Treynor Index is used to evaluate how well an investment performs in relation to its market risk. A higher Treynor Index indicates a better risk-adjusted return.

What is Sharpe ratio also called? The Sharpe ratio is a tool used by investors to help measure risk-adjusted return. The Sharpe ratio is calculated by subtracting the risk-free rate from the return of the investment and dividing that number by the standard deviation of the investment. The Sharpe ratio is also known as the Sharpe index or the Sharpe measure.

##### What does a Treynor ratio of 0.

5 mean? A Treynor ratio of 0.5 means that for every 1% increase in market risk, the portfolio would be expected to generate an additional 0.5% in return.

This ratio is used to measure a portfolio's risk-adjusted performance, and a higher ratio indicates a better performance.

#### What is Sharpe and Sortino ratio?

Sharpe and Sortino ratio are two ways to measure risk-adjusted return. Sharpe ratio measures the excess return over the risk-free rate per unit of volatility. Sortino ratio measures the excess return over the minimum acceptable return per unit of downside deviation. What are the 3 types of portfolio in assessment? 1. Strategic Portfolio

2. Tactical Portfolio

3. Operational Portfolio Is Sharpe ratio same as CAPM? The Sharpe ratio and the Capital Asset Pricing Model (CAPM) are both tools that can be used to evaluate investment portfolios. However, they are not the same thing.

The Sharpe ratio is a measure of risk-adjusted return. It takes into account the variability of returns and estimates the expected return of an investment based on its risk.

The CAPM is a model that estimates the expected return of an investment based on its beta, which is a measure of its volatility relative to the market.

So, while the Sharpe ratio and the CAPM are both ways to evaluate investment portfolios, they are not the same thing.