FormulaDen.com

Physics Chemistry Math Chemical Engineering Civil Electrical Electronics Electronics and Instrumentation Materials Science Mechanical Production Engineering Financial Health

Treynor Ratio Formula

Fx Copy

LaTeX Copy

Treynor's Ratio is a financial metric used to evaluate the risk-adjusted performance of an investment or a portfolio. Check FAQs

T r = \frac{R p - R f}{βp}

T_r - Treynor's Ratio?R_p - Expected Portfolio Return?R_f - Risk Free Rate?βp - Beta of the Portfolio?

Treynor Ratio Example

With values

With units

Only example

Here is how the Treynor Ratio equation looks like with Values.

Here is how the Treynor Ratio equation looks like with Units.

Here is how the Treynor Ratio equation looks like.

5.8824 = \frac{8 - 3}{0.85}

5.8824 = \frac{8 - 3}{0.85}

5.8824 = \frac{8 - 3}{0.85}

Tip: Use pencil ( Pencil

) icon above to edit Input Values and Units.

Calculate

Recalculate

Solution

Copy

Reset

You are here -

Home » Category

Financial » Category

Investment » Category

Important Formulas of Investment » fx Treynor Ratio

Treynor Ratio Solution

Follow our step by step solution on how to calculate Treynor Ratio?

FIRST Step Consider the formula

T r = \frac{R p - R f}{βp}

Next Step Substitute values of Variables

∴

T r = \frac{8 - 3}{0.85}

Next Step Prepare to Evaluate

∴

T r = \frac{8 - 3}{0.85}

Next Step Evaluate

∴

T r = 5.88235294117647

LAST Step Rounding Answer

∴

T r = 5.8824

Treynor Ratio Formula Elements

Variables

Treynor's Ratio

Treynor's Ratio is a financial metric used to evaluate the risk-adjusted performance of an investment or a portfolio.

Symbol: T_r

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Treynor's Ratio

Expected Portfolio Return

The Expected Portfolio Return is the combination of the expected returns, or averages of probability distributions of possible returns, of all the assets in an investment portfolio.

Symbol: R_p

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Expected Portfolio Return

Risk Free Rate

The Risk Free Rate is the theoretical rate of return of an investment with zero risks.

Symbol: R_f

Measurement: NAUnit: Unitless

Note: Value can be positive or negative.

Formulas to find Risk Free Rate

Beta of the Portfolio

The Beta of the Portfolio is the weighted sum of the individual asset betas.

Symbol: βp

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Beta of the Portfolio

Other formulas in Important Formulas of Investment category

Go Certificate of Deposit

CD = P0 Deposit \cdot {(1 + (\frac{r Annual}{n c}))}^{n c \cdot n t}

Go Compound Interest

FV = A \cdot {(1 + (\frac{i}{n}))}^{n \cdot T}

Go Capital Gains Yield

CGY = \frac{P c - P0}{P0}

Go Risk Premium

RP = ROI - Rf return

How to Evaluate Treynor Ratio?

Treynor Ratio evaluator uses Treynor's Ratio = (Expected Portfolio Return-Risk Free Rate)/Beta of the Portfolio to evaluate the Treynor's Ratio, The Treynor Ratio formula is defined as a financial metric used to evaluate the risk-adjusted performance of an investment or a portfolio. It was developed by Jack Treynor, an economist and financial theorist. Treynor's Ratio is denoted by T_r symbol.

How to evaluate Treynor Ratio using this online evaluator? To use this online evaluator for Treynor Ratio, enter Expected Portfolio Return (R_p), Risk Free Rate (R_f) & Beta of the Portfolio (βp) and hit the calculate button.

FAQs on Treynor Ratio

What is the formula to find Treynor Ratio?

The formula of Treynor Ratio is expressed as Treynor's Ratio = (Expected Portfolio Return-Risk Free Rate)/Beta of the Portfolio. Here is an example- 5.882353 = (8-3)/0.85.

How to calculate Treynor Ratio?

With Expected Portfolio Return (R_p), Risk Free Rate (R_f) & Beta of the Portfolio (βp) we can find Treynor Ratio using the formula - Treynor's Ratio = (Expected Portfolio Return-Risk Free Rate)/Beta of the Portfolio.

Let Others Know

✖

Facebook

Twitter

Copied!

: Value
: Unit

Treynor Ratio Formula

Treynor Ratio Example

Treynor Ratio Solution

Treynor Ratio Formula Elements

Other formulas in Important Formulas of Investment category

How to Evaluate Treynor Ratio?

FAQs on Treynor Ratio

Variable Name