Enhanced Indexing?

The Hayes University Endowment is willing to accept a certain degree of tracking risk, provided that it is compensated with incremental returns. In particular, Hayes wants to implement an investment approach that maximizes the information ratio.

To meet the objectives of the Hayes University Endowment, the most appropriate investment approach is an:

  1. Enhanced Index Approach

  2. Index Approach using stratified sampling

  3. Active Market oriented approach.

sounds like it.


“maximizing IR” seems like the keyword (bevause all 3 have a “certain” degree of TR)