# Port mgt question

Hi, Janice Barefoot, CFA, has managed a portfolio where she used the Dow Jones Industrial Average (DJIA) as a benchmark. In the past two years the average monthly return on her portfolio has been higher than that of the DJIA. To get a measure of active return per unit of active risk Barefoot should compute the: A) Sharpe ratio, which is the standard deviation of the differences between the portfolio and benchmark returns divided into the average of those differences. B) information ratio, which is the standard deviation of the differences between the portfolio and benchmark returns divided by the average of those differences. C) information ratio, which is the standard deviation of the differences between the portfolio and benchmark returns divided into the average of those differences. D) Sharpe ratio, which is the standard deviation of the differences between the portfolio and benchmark returns divided by the average of those differences.

I’m going with B…divided by the avg of differences.

c i think, since averages are in numerator and std. dev. in denominator

C?

C!!

it is C.

I agree…C. Chalk up another wrong one for me.

C, just finished with PM and will go back to it if not C

Answer is C. I got it wrong. I could not differentiate between B and C probably the wording!