{
  "slug": "information-ratio",
  "name": "Information Ratio",
  "category": "Risk-Adjusted Performance",
  "description": "Active return relative to a benchmark divided by tracking error. The hallmark metric for benchmarked managers.",
  "formula": "IR = (R_p - R_b) / TE",
  "formula_latex": "\\text{IR} = \\dfrac{R_p - R_b}{\\text{TE}}",
  "parameters": [
    {
      "name": "Portfolio return",
      "symbol": "R_p",
      "type": "percent",
      "default": 0.1
    },
    {
      "name": "Benchmark return",
      "symbol": "R_b",
      "type": "percent",
      "default": 0.08
    },
    {
      "name": "Tracking error",
      "symbol": "TE",
      "type": "percent",
      "default": 0.04,
      "min": 0.0001
    }
  ],
  "outputs": [
    {
      "name": "Information Ratio",
      "symbol": "IR",
      "type": "number"
    }
  ],
  "worked_example": {
    "narrative": "Active manager beats S&P by 200 bps with 4% tracking error.",
    "inputs": {
      "R_p": 0.1,
      "R_b": 0.08,
      "TE": 0.04
    },
    "expected_outputs": {
      "ir": 0.5
    }
  },
  "related_terms": [
    "information-ratio",
    "tracking-error",
    "alpha"
  ]
}