Information Ratio Portfolio Performance Measures

question 83

Multiple Choice

Information ratio portfolio performance measures

• A) Adjust portfolio risk to match benchmark risk.
• B) Compare portfolio returns to expected returns under CAPM.
• C) Evaluate portfolio performance on the basis of return per unit of risk.
• D) Indicate historic average differential return per unit of historic variability of differential return.
• E) None of the above.

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Definitions:

Partnership

A legal form of business operation between two or more individuals who share management and profits.

Personal Income

The total income received by an individual from all sources before taxes.

Business Losses

Financial losses incurred during the operation of a business, often resulting from expenses exceeding revenues.

Taxes

Compulsory financial charges or levies imposed by a government on individuals or organizations to fund public expenditure.