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    Interpreting Sharpe Measure and Treynor Measure

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    Interpreting these measurements. (Attached)

    What is the importance of them. And what is the difference between the performance of them compared to the market index.

    Company R Rf Standard Deviation Sharpe Measure
    Walt Disney 8.11 4.6 3.786 0.927
    Ford 11.886 4.6 3.786 1.925
    Microsoft 6.958 4.6 3.786 0.623
    Lowe's 6.83 4.6 3.786 0.589
    Wal-mart 1.326 4.6 3.786 -0.865

    Company R Rf Beta Treynor Measure
    Walt Disney 8.11 4.6 1.26 2.786
    Ford 11.886 4.6 1.85 3.938
    Microsoft 6.958 4.6 1.08 2.183
    Lowe's 6.83 4.6 1.06 2.104
    Wal-mart 1.326 4.6 0.2 -16.370

    Company Rp Rf Beta rM-rf B(rM-rf) Jensen Measure
    Walt Disney 8.11 4.6 1.26 6.4 8.064 -4.554
    Ford 11.886 4.6 1.85 6.4 11.84 -4.554
    Microsoft 6.958 4.6 1.08 6.4 6.912 -4.554
    Lowe's 6.83 4.6 1.06 6.4 6.784 -4.554
    Wal-mart 1.326 4.6 0.2 6.4 1.28 -4.554

    © BrainMass Inc. brainmass.com October 9, 2019, 6:39 pm ad1c9bdddf
    https://brainmass.com/business/finance/interpreting-sharpe-measure-and-treynor-measure-94078

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    Solution Preview

    Company R Rf Standard Deviation Sharpe Measure
    Walt Disney 8.11 4.6 3.786 0.927
    Ford 11.886 4.6 3.786 1.925
    Microsoft 6.958 4.6 3.786 0.623
    Lowe's 6.83 4.6 3.786 0.589
    Wal-mart 1.326 4.6 3.786 -0.865

    Company R Rf Beta Treynor Measure
    Walt Disney 8.11 4.6 1.26 2.786
    Ford 11.886 4.6 1.85 3.938
    Microsoft 6.958 4.6 1.08 2.183
    Lowe's 6.83 4.6 1.06 2.104
    Wal-mart 1.326 4.6 0.2 -16.370

    Company Rp Rf Beta rM-rf B(rM-rf) Jensen Measure
    Walt Disney 8.11 4.6 1.26 6.4 8.064 -4.554
    Ford 11.886 4.6 1.85 6.4 11.84 -4.554
    Microsoft 6.958 4.6 1.08 6.4 6.912 -4.554
    Lowe's ...

    Solution Summary

    This solution is comprised of a detailed explanation to interpret Sharpe Measure and Treynor Measure and explain what is the difference between the performance of them compared to the market index.

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