AIM: Describe the uses for the Modigliani-squared and Treynor’s measure in comparing two portfolios, and the graphical representation of these measures. Questions: 17.1. The following data compares a Portfolio (P) to the Market (M): What is Modigliani-squared (M^2) measure of the portfolio? a. -2.5% b. +0.5% c. +3.0% d. +6.0% 17.2. The following data compares two portfolios, Portfolio (A) and Portfolio (B), to the Market(M): If we rank the portfolios according to, respectively, the Modigliani-squared (M^2) measure and slope of the T-line (equalizing for beta), how do the portfolios rank against each other? a. Portfolio (A) offers both a higher M^2 and steeper T-line than Portfolio (B) b. Portfolio (A) offers a higher M^2, but Portfolio (B) has a steeper T-line c. Portfolio (B) offers a higher M^2, but Portfolio (A) has a steeper T-line d. Portfolio (B) offers both a higher M^2 and steeper T-line than Portfolio (A) 17.3. The following data compares two portfolios, Portfolio (A) and Portfolio (B), to the Market(M): What are, respectively, the Treynor-squared (T^2) measure of Portfolio (A) and Portfolio (B)? a. T^2(A) = -1.0% and T^2(B) = 1.7% b. T^2(A) = 1.0% and T^2(B) = 2.8% c. T^2(A) = 3.0% and T^2(B) = 7.5% d. T^2(A) = 5.0% and T^2(B) = 10.0% Answers: Here in forum