What is Information Ratio?
In this glossary, Information Ratio refers to: A performance measure comparing the active return of a portfolio to the tracking error, showing how efficiently a manager generates excess return relative to benchmark risk.
How is Information Ratio used in finance?
In finance communication, this term appears in contexts such as: "A higher Information Ratio suggests the manager consistently adds value by outperforming the benchmark relative to the level of active risk taken."
Why does Information Ratio matter in finance?
Information Ratio matters because it supports clear communication in Investment contexts for Financial Analysts, Bankers, and Traders. It also connects to aviation training and exam language such as CFA, ACCA, and FRM.
Who uses Information Ratio?
Information Ratio is mainly used by Financial Analysts, Bankers, and Traders.
What category does Information Ratio belong to?
In this glossary, Information Ratio is grouped under Investment. Related pages in this category explain adjacent procedures, commands and operational concepts.
Where does this definition come from?
This definition is sourced from CFA Institute, IFRS Foundation, FASB (GAAP), Basel III Framework and published by Protermify Finance as a static finance reference page.
