Answer: 0.20

The Treynor measure, also known as the Treynor ratio, is a performance metric that evaluates the risk-adjusted excess return of a portfolio. It is calculated by dividing the portfolio's excess return over the risk-free rate by its beta coefficient. In this case, the Treynor measure (Tp) is calculated using the formula: \[ Tp = \frac{E(Rp) - RF}{\beta_p} \] Where: - \( E(Rp) \) is the expected return of the portfolio, which is 9%. - \( RF \) is the risk-free rate, which is 3%. - \( \beta_p \) is the beta of the portfolio, which is 0.3. Plugging in the values from the question, we get: \[ Tp = \frac{9\% - 3\%}{0.3} = \frac{6\%}{0.3} = 20\% \] Thus, the Treynor measure of portfolio LCM is 0.20, which corresponds to option C. This measure indicates that for every unit of market risk taken on by the portfolio, it generates a return of 20% above the risk-free rate.

Author: LeetQuiz Editorial Team