Question: Suppose you manage a portfolio and your average return equals the benchmark return. What is the value of the information ratio? Suppose you manage a

Suppose you manage a portfolio and your average return equals the benchmark return. What is the value of the information ratio? Suppose you manage a second portfolio that has an average return that always exceeds the benchmark return, but the tracking risk is expected to decrease in 2023 due to an improved inflation outlook.

What will happen to the information ratio in the coming year? Explain your responses.

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