Treynor Black: Is the Passive Portfolio always the Market Portfolio?

Suppse you’re running a Biotech themed fund. You make the Passive Portfolio the Biotech Index (i.e. the IBB ETF) and you pick various biotech stocks you believe will have positive alpha calculated with respect to the IBB index (and not a broad-based index like the S&P500.) And then you assign the weights based on the formulas presented in that Chapter.

Does this fit the philosophy of Treynor Black or are you only supposed to use the market portfolio as the passive portfolio?

In practice, you could call IBB the passive portfolio.

For the exam, it’s the market.

Thanks, that’s what I needed to hear.