Information Ratio and Active Risk

CFA Level III
#1

My understanding is that IR = (total active return) / (total active risk)

But I have seen at some point that IR = (true active return) / (true active risk).

Which one is correct?..

#2

both are correct

what is the difference between true and total

#3

Agree with the above. The total will include misfit active risk and return.

#4

True Active Risk is the standard deviation of the difference between Total Return and Normal Portfolio Return.

Total Active Risk = Sqrt(True Active Risk^2 + Misfit Active Risk^2).