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Morningstar Analyst Rating NAV T. Rowe Price Blue Chip Growth Fund TRBCX NAV $ NAV Day Change % Yield TTM Total Assets $ Stat

Assume the beta for T. Rowe TRBCX is 1.05 and the risk-free rate is 20bps. Use the figures in Exhibit 3.1, calculate the 1-Yr

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Answer #1

Given-

Risk free return- 0.20bps

Beta-1.05

Portfolio return-0.88bps(for 1 year)

Treynor Ratio- (Portfolio Return-Risk free return)/Portfolio Beta

=(.0088-.0020)/1.05=0.006476

Note- I have converted bps into percentage returns by diving the bps by 100 e.g. 0.88bps=0.88/100=0.0088

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