Calculating Treynor Ratio of the Mutual Fund Portfolio

Mastering Mutual Fund Investment: Part 3 of 3 Calculating Metrics for a Mutual Fund Portfolio
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Transcript

Hello, welcome back. As the last part of this section we discuss how to calculate treynor ratio for a mutual fund portfolio. Now, in case you are not aware of what is tender ratio, please refer to the course mastering mutual fund investment, part two of three, we have discussed the different ratios and indicators for mutual fund in that particular course. The formula for calculating treynor ratio is ra minus RF divided by beta p, where r is the expected return from the mutual fund portfolio, RF is the risk free rate and beta p is the beta of the mutual fund portfolio. We now see how to calculate return ratio for a mutual fund portfolio using Excel. So, here on these Excel we have our mutual fund portfolio.

So, here we have the expected return from the portfolio. This is a risk free rate 4% and here is the beta that we have calculated for the mutual fund portfolio. So, now we can put the formula for turnover ratio that is ra minus RF divided by beta. So, we get a trainer ratio of 0.1 to two for this mutual fund portfolio that we have created as a sample. So, we have seen how to calculate a ratio for a mutual fund portfolio. With this, we have come to the end of this section.

And in fact, we have come to the end of this course. Thank you for listening

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