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Basic Question 6 of 7
Here is information about an equity fund:
B. remain the same.
C. increase, but not as much as by 100%.
If active risk is increased to 6%, the expected return will ______
A. double, leaving the information ratio to be the same.
B. remain the same.
C. increase, but not as much as by 100%.
User Contributed Comments 1
| User | Comment |
|---|---|
| davidt87 | TC = 1 is perfectly unconstrained |
Your review questions and global ranking system were so helpful.
Lina
Learning Outcome Statements
explain how the information ratio may be useful in investment manager selection and choosing the level of active portfolio risk;
compare active management strategies, including market timing and security selection, and evaluate strategy changes in terms of the fundamental law of active management;
CFA® 2025 Level II Curriculum, Volume 6, Module 38.