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%
E) 67.00%

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% 
E) 67.00%

Quizplus · Accepted Answer

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

The Following Data Are Available Relating to the Performance of Wildcat