Sharpe, Treynor, Jensen's alpha, M-squared, Sortino and the information ratio, each computed and each unpacked, fill the GF570 Unit 7 risk adjusted performance exercise for two composite managers. Searches like "gf 570 unit 7 assignment example", "gf570 unit 7 sample" and "gf570 unit 7 example" land here.
What a finished GF570 Unit 7 risk adjusted performance exercise looks like
Six years of annual returns in one table, then two pages of measures and two of interpretation. Manager A averaged 10.43 percent with 18.56 percent volatility and a beta of 1.154; Manager B averaged 8.38 with 9.60 volatility and a beta of 0.585; the benchmark averaged 9.08 with 16.00, and bills 1.87. B leads on the Sharpe ratio, 0.679 against 0.462, on Treynor, 11.13 against 7.42, on Jensen's alpha, 2.29 against 0.24, on M-squared, 12.73 against 9.25, and on Sortino, 1.63 against 1.04. A leads only on the information ratio, 0.443 against minus 0.101, because B trailed the benchmark by 0.70 a year with tracking error of 6.96. A closing section asks which result matters for an equity sleeve.
How a GF570 Unit 7 example is structured
The data table comes first with arithmetic and geometric means, sample standard deviations and the bill average used as the risk-free rate throughout. Beta is estimated by regressing each manager on the benchmark, with covariance and variance shown. The measures then appear in groups by the risk they charge for: total volatility for Sharpe and M-squared, systematic risk for Treynor and Jensen's alpha, downside deviation for Sortino, and deviation from the benchmark for the information ratio. Each measure gets its formula, both managers' figures and one sentence stating its assumption about the investor. A ranking table sets the six results side by side. Interpretation follows: what each measure would recommend, which question the foundation is actually asking, and why six annual observations make every estimate tentative.
One risk-free rate throughout
The six-year bill average of 1.87 percent serves every measure, and a note shows how the Sharpe ratios shift if each year's own bill rate is used instead.
Beta from the regression
Covariance with the benchmark divided by its variance gives 1.154 for A and 0.585 for B, with correlations of 0.995 and 0.976 reported beside them.
Charged for total risk
Sharpe and M-squared both favor B, whose volatility is about 60 percent of the benchmark's, and the exercise says these suit an investor holding one manager alone.
Charged for systematic risk
Treynor and Jensen's alpha favor B more strongly, since its low beta makes a modest return look efficient per unit of market exposure.
Measured against the index
The information ratio reverses the verdict: A beat the benchmark by 1.35 a year with 3.04 of tracking error, while B trailed it.
The question that decides
For a sleeve meant to deliver the policy's equity exposure, the exercise weighs the information ratio and alpha together and flags B's beta as a change in allocation.
Where marks go in GF570 Unit 7
Performance exercises lose most when measures are computed correctly and then reported as a league table that never says what each assumes, since the unit exists to teach that choice. A Sharpe ratio used to judge a manager who will be one sleeve of a larger portfolio, without comment, applies total risk where systematic risk is the relevant charge. Betas estimated from six points and presented without caution overstate what the data can support. Sortino ratios computed with an unstated minimum acceptable return cannot be checked. The information ratio should also be read against the mandate: a manager who beats the index by lowering beta has changed the allocation rather than added skill. Answers that pick a winner before deciding which question is being asked tend to lose the interpretation marks.
Get a GF570 Unit 7 example written to your instructions
Supply the return series, risk-free rate and benchmark from your GF570 Unit 7 prompt with the rubric; the calculations are shown in spreadsheet form or by hand as your section prefers. Each measure is computed, its assumption named, and the investor's own question decides which one leads. The first custom sample is free, typically inside 24-48h.
GF570 Unit 7 questions, answered
Which measure should I recommend?
The one matching the question your prompt asks. Sharpe fits an investor holding the manager as the whole risky portfolio; Treynor and alpha fit a manager who is one part of a diversified whole; the information ratio fits a mandate judged against an index. The sample reports all six, then chooses based on how the foundation would actually use the manager.
Is six years of data enough?
It is enough to compute every measure and too little to trust any of them fully. Six annual observations give beta and alpha wide margins of error, and one unusual year can reverse a ranking. The sample says so plainly and treats the results as evidence for further review rather than a final verdict, which most graders expect at this level.
What minimum acceptable return does Sortino use?
Whatever your prompt specifies, stated before the calculation. The sample uses the average bill rate so that Sortino and Sharpe share a hurdle and differ only in how they measure risk. Some texts use zero or the investor's required return instead, and changing the hurdle changes the downside deviation, so the choice must be visible.