Information ratio portfolio performance measures
A) Adjust portfolio risk to match benchmark risk.
B) Compare portfolio returns to expected returns under CAPM.
C) Evaluate portfolio performance on the basis of return per unit of risk.
D) Indicate historic average differential return per unit of historic variability of differential return.
E) None of the above.

Question

Quizplus · Accepted Answer

The information ratio measures the average differential return of a portfolio relative to a benchmark, per unit of the variability of that differential return.

Information Ratio Portfolio Performance Measures