[Biff-1955-Tannen]

Can somebody help me understand what I need to look for in questions to determine if it’s referring to Treynor, Jensen, or Sharpe? I have absolutely no idea what any of these concepts are…

It was time for an investment advisor to meet with one of her major clients for the annual review of his portfolio. She knew that the investor would be very interested in the performance of his portfolio in the turbulent and volatile market that had existed for the past 12 months. She reviewed the client’s file and saw that he had indicated that he expected his portfolio would provide him with a risk-adjusted return that provided a high portfolio return per unit of risk. She picked up the phone and called one of the firm’s analysts and asked him to complete an analysis of the ________ for the portfolio.

A.

Treynor index

B.

Jensen measure

C.

fair market value

D.

Sharpe measure

Answer is A.

“The Sharpe measure of portfolio risk provides information similar to that of the Treynor index, except that the risk measure is the standard deviation of the portfolio rather than beta. The Jensen measure of portfolio risk measures the absolute value of performance of a portfolio on a risk-adjusted basis.”

This is the explanation for the answer, and it means absolutely nothing to me in terms of how to differentiate the three, short of knowing which formula goes with which.

AUD 93 Jan 16
BEC 83 Feb 16
FAR 83 Apr 16
REG 84 May 16

99% Ninja MCQ only

[Stgeorge]

I have never even heard of the Treynor index….. What test bank is this question from? I am guessing in terms of how they try to explain it, but it seems like the treynor index takes into account the portfolio relative to what is going on in the overall market. Since the investor wanted to know the performance of the portfolio relative to the volatile market?

Crazy but I dont recall seeing the sharpe measure or the Jensen measure in my review either. I am taking BEC feb. 12th and just started doing MCQ, after using Becker self study. I am utilizing WTB first and going through all the MCQ for that test bank. After I plan on spending the last 14-16 days solely using Ninja MCQ. Hopefully I hit the review stage. What is your plan of attack?

FAR 81
AUD 65, 84 (Used Ninja MCQ which I say contributed to my huge increase in score I love you Jeff)
REG 87 (CPA excel Wiley Self Study Book, Ninja 10 point combo)
BEC 86! I Must Pass or I lose my FAR Credit, Pray for me(Becker, Wiley, WTB, Ninja MCQ, Ninja Notes)

DONE!!!!!!

Using : Wiley CPA Exam Review Textbook, Wiley TB, Ninja Notes, Ninja MCQ

[Claudia408]

I recall this Ninja question… I took BEC 3x and I never got these Treynor, Sharpe type questions. It's one of those randoms I think they can test you on, but wouldn't spend a lot of time on it other than knowing what it is and the differences.

BEC - 75 (3x)
AUD - 78 (3x)
REG - 67, 66, Aug 1
FAR - 54, Sept 8

[Stgeorge]

Hi claudia
Just wondering what material you used to study and also did you use Ninja MCQ for all 3 takes or just the last one? Any advice would be great!

FAR 81
AUD 65, 84 (Used Ninja MCQ which I say contributed to my huge increase in score I love you Jeff)
REG 87 (CPA excel Wiley Self Study Book, Ninja 10 point combo)
BEC 86! I Must Pass or I lose my FAR Credit, Pray for me(Becker, Wiley, WTB, Ninja MCQ, Ninja Notes)

DONE!!!!!!

Using : Wiley CPA Exam Review Textbook, Wiley TB, Ninja Notes, Ninja MCQ

[Biff-1955-Tannen]

This question is from Ninja MCQ. Wiley didn't say a word about the Treynor index.


@Claudia408, that is pretty much what I was thinking too… oh well

AUD 93 Jan 16
BEC 83 Feb 16
FAR 83 Apr 16
REG 84 May 16

99% Ninja MCQ only

[monikernc]

Biff, the give away in the question is that the treynor provides the portfolio return per unit risk.

FAR 7/25/15 76!
AUD 10/30/15 93
BEC 2/27/16 82
REG 5/23/16 88!
Ninja Book and MCQ and the forum - all the way!!!
and a little thing i like to call, time and effort!
if you want things to change, you have to do something different

[Biff-1955-Tannen]

@monikernc, ah ok I see. I still don't really understand these concepts, but at least I have something to possibly look for now. Thank you!

AUD 93 Jan 16
BEC 83 Feb 16
FAR 83 Apr 16
REG 84 May 16

99% Ninja MCQ only

[Claudia408]

Stgeorge

I used Wiley Platinum for attempt #1… added Ninja 10 pt combo for attempt 2 & 3, but that only helped to get those few extra points in my problem areas to reach 75. But BEC I think is the hardest section so far that I also youtubed the hell out of BEC topics hoping a different way of explaining things to me would work.

BEC - 75 (3x)
AUD - 78 (3x)
REG - 67, 66, Aug 1
FAR - 54, Sept 8

[monikernc]

I also remember Treynor uses beTA – the T's and Sharpe uses Standard deviation – the S's. And Jensen is just long!

FAR 7/25/15 76!
AUD 10/30/15 93
BEC 2/27/16 82
REG 5/23/16 88!
Ninja Book and MCQ and the forum - all the way!!!
and a little thing i like to call, time and effort!
if you want things to change, you have to do something different

[Biff-1955-Tannen]

@monikernc lol perfect. I'll have to remember that

AUD 93 Jan 16
BEC 83 Feb 16
FAR 83 Apr 16
REG 84 May 16

99% Ninja MCQ only

[Author]

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