Question #35
Reading: Reading 40 Analysis of Active Portfolio Management
PDF File: Reading 40 Analysis of Active Portfolio Management.pdf
Page: 15
Status: Correct
Correct Answer: A
Question
An active manager has an information coefficient of 0.05 and makes 36 independent bets per year. What is the manager's information ratio given a transfer coefficient of 0.75?
Answer Choices:
A. 0.23
B. 0.45
C. 1.35
Explanation
Information ratio =