Characteristics of Information Ratio
The main characteristics of the information ratio are as follows:
- The information ratio estimates ex-post value added and relates this to ex-ante opportunity available in the future.
- The residual frontier that describes the opportunities accessible to the active manager is identified by the information ratio.
- The level of aggressiveness for each manager is decided by his/her information ratio.
- Sometimes intuition can give a good clue about the information ratio and residual risk aversion.
- Value added depends on the managers’ prospects and aggressiveness.
Read more about this topic: Information Ratio
Famous quotes containing the words characteristics of, information and/or ratio:
“One of the characteristics of the dream is that nothing surprises us in it. With no regret, we agree to live in it with strangers, completely cut off from our habits and friends.”
—Jean Cocteau (1889–1963)
“On the breasts of a barmaid in Sale
Were tattooed the prices of ale;
And on her behind
For the sake of the blind
Was the same information in Braille.”
—Anonymous.
“Personal rights, universally the same, demand a government framed on the ratio of the census: property demands a government framed on the ratio of owners and of owning.”
—Ralph Waldo Emerson (1803–1882)
Related Phrases
Related Words