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Information Ratio |
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Information RatioThe ratio of annualized expected residual return to residual risk. A central measurement for active management, value added is proportional to the square of the information ratio.Information Ratio Similar MatchesIncomplete informationIncomplete informationSee complete information. Asymmetric informationAsymmetric informationThe failure of two parties to a transaction to have the same relevant information. Examples are buyers who know less about product quality than sellers, and lenders who know less about likely default than borrowers. Both are common in international markets. Asymmetric informationAsymmetric informationInformation that is known to some people but not to other people. Insider informationInsider informationPrice-sensitive information about a company that has not yet been made public.People who use the information either to make a profit for themselves or for someone else are committing a criminal offence (insider dealing).The inside dealer does not have to work for the company for his dealing to be an offence. So a stockbroker, or merchant banker, who knows about an impending takeover deal who buys shares in the target company with the intention of making a profit, is guilty. If he gets a friend to buy the shares, he is still guilty. In theory, the net is cast quite wide. In practice, insider dealing prosecutions are rare, and successful ones rarer still because the allegations are so hard to prove.Note the difference between insider dealing (an offence) and directors dealings (not an offence). Fundamental InformationFundamental InformationInformation relating to the economic state of a company or economy. In market analysis, fundamental information is related to the earnings prospects of the firm only. Further SuggestionsInformational efficiencyInformation content effect Technical Information Insider information Informational efficiency Statement of Additional Information (SAI) Limit order information system Complete information Information Agent London Market Information Link Information services Intermarket Surveillance Information System (ISIS) Information Coefficient (IC) price sensitive information For your information (FYI) Information asymmetry Information costs Expected value of perfect information Nonpublic information Information architecture |
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