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Active vs Passive
Active vs Passive
Easy
According to the Fundamental Law of Active Management, the expected information ratio (IR) of an actively managed portfolio is determined by:
A
The manager's skill (information coefficient) multiplied by the square root of the number of independent investment decisions (breadth)
B
The portfolio's alpha divided by its beta
C
The Sharpe ratio of the portfolio minus the Sharpe ratio of the benchmark
D
The tracking error multiplied by the number of securities in the portfolio
Select an answer to continue
Tags
#fundamental-law
#information-ratio
#active-management
#information-coefficient
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CFA Level III — Active vs Passive Practice Question | AcadiFi | AcadiFi