tracking error and IR Flashcards

(5 cards)

1
Q

tracking error

A

Deviation from benchmark

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2
Q

high tracking error

A

Large deviation from benchmark

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3
Q

Key limitation of tracking error

A

Cannot distinguish good vs bad performance

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4
Q

Information Ratio formula

A

Excess return / tracking error

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5
Q

high IR

A

Strong risk-adjusted active performance

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