Compute individual treynor ratio of each share and comment

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Reference no: EM132706093

RHB mutual fund evaluates two portfolios X and Y which consist of the same securities but held in different proportions. It has compiled the following details. Risk free rate is 5.75% and the market return is 13.25%.

Shares Investment RM in millions           Investment RM in millions Beta

                                                    Portfolio X Portfolio Y
Maxis Berhad 40                                         80 1.37
Petronas Chemicals    50    70 1.85
Group
Axiata Group Berhad    60                                       60                                    2.10
Sime Darby Berhad 70 50    0.90
Maybank    80    40

total    300    300

Required:

Question 1. Compute the returns of the above shares.

Question 2. Compute the individual Treynor ratio of each share and comment.

Question 3. Calculate the returns of the above two portfolios.

Question 4. Calculate the risks of the above two portfolios.

Question 5. Discuss which portfolio is good in your opinion in terms of Treynor ratio.

Reference no: EM132706093

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