A Fund Has an Alpha of

question 26

Multiple Choice

A fund has an alpha of .89% and a tracking error of 3.8%. What is the fund's information ratio?

• A).112
• B).135
• C).149
• D).212
• E).234

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Definitions:

Federal Reserve System

The central banking system of the United States, responsible for monetary policy, regulation of member banks, and ensuring stability of the financial system.

District Banks

Banks that are part of a larger Federal Reserve System in the United States, responsible for overseeing the monetary policy and banking regulations in their specific district.

Federal Reserve District Banks

The 12 regional banks in the Federal Reserve System which oversee and regulate banking institutions within specific geographic areas of the US.

Discount Rate

The interest rate charged by central banks on loans to commercial banks or the rate used in discounted cash flow (DCF) analysis to determine the present value of future cash flows.