Asked by
mindahun admassu
on Nov 04, 2024
Verified
The Treynor-Black model
A) considers both macroeconomic and microeconomic risks.
B) considers security selection only.
C) is nearly impossible to implement.
D) considers both macroeconomic and microeconomic risks and is nearly impossible to implement.
E) considers security selection only and is nearly impossible to implement.
Treynor-Black Model
The Treynor-Black Model is a portfolio optimization method that combines actively selected securities with a passively managed market portfolio for better risk-adjusted returns.
Macroeconomic Risks
Risks that arise from changes in economic policies, political stability, or other macroeconomic factors that can impact the overall market.
Microeconomic Risks
Risks associated with the effects of market mechanisms on supply and demand, influencing individual decisions in small-scale economies.
- Acquire knowledge of the core principles and underlying assumptions of the Treynor-Black model applied to portfolio management.
- Employ macroeconomic and aggregate forecasts for identifying the optimal risky portfolio within the Treynor-Black framework.
Verified Answer
DT
Learning Objectives
- Acquire knowledge of the core principles and underlying assumptions of the Treynor-Black model applied to portfolio management.
- Employ macroeconomic and aggregate forecasts for identifying the optimal risky portfolio within the Treynor-Black framework.