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You are managing the family office for a retired hedge fund manager (a family office is an investment fund which manages the money of a
You are managing the family office for a retired hedge fund manager (a family office is an investment fund which manages the money of a wealthy individual or family). After evaluating a potential investment into a long-only mutual fund XYZ, you have determined that optimally - i.e. in a way that maximizes the resulting Sharpe ratio-adding this fund into the family office's portfolio will increase the family office's Sharpe ratio from 0.32 to 0.46 . What must be the information ratio of XYZ relative to the returns of the family office? Report your answer rounded to 3 decimals (e.g., 0.7876=0.788,0.7874=0.787,12.45%= 0.125,12.43%=0.124 )
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