Answer: 0.20

The Treynor measure is calculated using the formula: \[T_p = \frac{E(R_p) - R_F}{\beta_p}\] Where: - \(E(R_p)\) = Expected return of the portfolio = 9% - \(R_F\) = Risk-free rate = 3% - \(\beta_p\) = Beta of the portfolio = 0.3 Substituting the values: \[T_p = \frac{9\% - 3\%}{0.3} = \frac{6\%}{0.3} = 0.20\] Therefore, the Treynor measure of portfolio LCM is 0.20. **Key Points:** - The Treynor measure evaluates risk-adjusted returns relative to systematic risk (beta) - It measures excess return per unit of systematic risk - Higher Treynor ratios indicate better risk-adjusted performance - Unlike Sharpe ratio which uses total risk (standard deviation), Treynor uses only systematic risk (beta)

Author: LeetQuiz .