/// Calculates the Treynor Ratio for a portfolio.

///

/// # Inputs

/// - `portfolio_return`: Portfolio return

/// - `risk_free_rate`: Risk-free rate

/// - `beta`: Portfolio beta

/// where Beta is a financial metric that measures the systematic risk of a security or portfolio compared to the overall market.

///

/// # Output

/// - Returns excess return per unit of market risk

pub fn treynor_ratio(portfolio_return: f64, risk_free_rate: f64, beta: f64) -> f64 {

if beta == 0.0 {

f64::NAN

} else {

(portfolio_return - risk_free_rate) / beta

}

}

#[cfg(test)]

mod tests {

use super::*;

#[test]

fn test_treynor_ratio() {

// for portfolio_return = 0.10, risk_free_rate = 0.05, beta = 1.5

// expected result: (0.10 - 0.05) / 1.5 = 0.033333...

assert!((treynor_ratio(0.10, 0.05, 1.50) - 0.03333).abs() < 0.01);

}

#[test]

fn test_treynor_ratio_empty_beta() {

// test for zero beta (undefined ratio)

assert!(treynor_ratio(0.10, 0.05, 0.00).is_nan());

}

}