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Easy · portfolio_optimization · Quant Researcher interview question · treynor_ratio, systematic_risk, beta, performance_measurement, portfolio_optimization
The Treynor ratio is a performance metric that measures the excess return generated per unit of systematic risk, as defined by beta. It is essential for performance attribution, allowing quants to evaluate how well a portfolio is compensated for taking on non-diversifiable market risk. This ratio is particularly useful when comparing investment strategies within a well-diversified portfolio. Task Implement the function treynor_ratio(portfolio_returns: list, benchmark_returns: list, risk_free_ra