The information ratio permits only relative assessments of performance for different portfolios in a style class.

Name: The information ratio permits only relative assessments of performance for different portfolios in a style class.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

The information ratio measures the excess return of a portfolio relative to its benchmark, adjusted for tracking error. Since it is a measure of relative performance, it allows for comparisons only within the same style class or benchmark.

The Information Ratio Permits Only Relative Assessments of Performance for Different