Information Ratio

Information ratio - It is an investment terminology, which means the ratio of expected return to risk. This ration is measured using standard deviation. Usually this may be a statistical technique is used to measure a manger performance against a benchmark. The ration will look like this the information ratio, which is equal top line states the retune of the portfolio minus the return of the index or the benchmark the bottom line number is the tracking error. This ratio will help in determining if the investment manger beat the benchmark bit a littlie or a lot in a few short months.