Answered step by step
Verified Expert Solution
Question
1 Approved Answer
The information ratio is the ratio of the alpha of the portfolio to idiosyncratic risk of the portfolio (the standard deviation of the error term
The information ratio is the ratio of the alpha of the portfolio to idiosyncratic risk of the portfolio (the standard deviation of the error term of the return generating process). It is a good measure to use to evaluate actively managed portfolios, if the asset owner agrees to complement the passive portfolio management with a modest amount of active portfolio management to take advantage of capable active managers. Is the above statement true or false?
A. True B. False
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started