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) the average market beta per unit of risk.

Question

Quizplus · Accepted Answer

The information ratio measures the average differential return (excess return over a benchmark) per unit of the variability of that differential return, indicating how much excess return is achieved for each unit of risk taken relative to the benchmark.

Information Ratio Portfolio Performance Measures