Performance evaluation allows us to assess the performance of fund managers going beyond historical returns. In particular, we recognize that risk is an hinportant factor when assessing the performance of fund managers and hence it should be taken into account when evaluating fund managers. However, there are many measures used to assess this risk adjusted performance.

a. Identify circumstances in which the Sharpe and Treynor indices can provide conflicting fund rankings and discuss why this is the case.

b. Describe Jensen's alpha and the Carhart (1997) model.

c. Describe how the information ratio is calculated and what it attempts to measure.