The Treynor measure is a performance metric used to evaluate the risk-adjusted excess return of a portfolio over the risk-free rate. It is calculated using the formula:

$Tp = \frac{E(Rp) - RF}{\beta_p}$

where $E(Rp)$ is the expected return of the portfolio, $RF$ is the risk-free rate, and $\beta_p$ is the beta of the portfolio.

In the provided file content, the Treynor measure for portfolio LCM is calculated as follows:

• The expected return of portfolio LCM is 9% (or 0.09 as a decimal).
• The risk-free rate is 3% (or 0.03 as a decimal).
• The beta of portfolio LCM is 0.3.

Plugging these values into the Treynor measure formula gives:

$Tp = \frac{0.09 - 0.03}{0.3} = \frac{0.06}{0.3} = 0.20$

Thus, the Treynor measure for portfolio LCM is 0.20, which corresponds to option C in the multiple-choice question. This measure indicates that for every unit of market risk taken on by the portfolio, it generates a 20% excess return over the risk-free rate.