Performance Appraisal
Investment performance appraisal identifies and measures investment skill, providing the information to assess how effectively money has been invested given …
information ratio
Module 50.3 LOS 50.d: Using the Information Ratio and Sharpe Ratio
Investors are said to choose some combination of the risk-free asset and an optimal risky portfolio. The weights will be …
Module 47.3 LOS 47.e: Components of Active Risk and Active return
Active return is the difference in returns between a managed portfolio and its benchmark: Active return = RP – RB Active risk (also …
Module 50.2 LOS 50.b: The information ratio vs the Sharpe ratio and the optimal risk amount
For review, the Sharpe ratio (SR) is the excess return per unit of risk. It is unaffected by cash inflows or leverage. …