To calculate the Information Ratio for a fund, first calculate the excess return achieved over 5 years by subtracting the benchmark return from the fund return; unlike the Sharpe ratio, the benchmark used for the Information Ratio does not need to be the risk-free rate.

Authors

• Person: Not available Organization: FE Training
  Risk and Return Explained - Financial Edge

Sources

• Risk and Return Explained - Financial Edge www.fe.training FE Training via serper

Referenced by nodes (1)

• Sharpe ratio concept