The following data are available relating to the performance of Wildcat Fund and the market portfolio: The risk-free return during the sample period was 7%. What is the information ratio measure of performance evaluation for Wildcat Fund
A)1.00%
B)8.80%
C)44.00%
D)50.00%

Question

The following data are available relating to the performance of Wildcat Fund and the market portfolio:  The risk-free return during the sample period was 7%. What is the information ratio measure of performance evaluation for Wildcat Fund
A)1.00% 
B)8.80% 
C)44.00% 
D)50.00%

Quizplus · Accepted Answer

α_P = 18% - [7% + 1.25(15% - 7%)] = 1%; α_P/σ(e_P) = 1%/2% = 0.50, or 50.00%.

The Following Data Are Available Relating to the Performance of Wildcat