In Schweser exam 1 question 59 the text reads:
Manager B: Unconstrained optimization involving monthly bets on market timing (rotation between equity and cash). Manager B is correct 55% of the time.
Now, I thought the IC would be 0,55, but it is calculated as (2*0,55) - 1. I guess this is the formula 2 (Nc/N) - 1. Am I right that we would use 3 instead of 2 if the manager was switching between e.g. cash, bonds and stocks?
Manager B: Unconstrained optimization involving monthly bets on market timing (rotation between equity and cash). Manager B is correct 55% of the time.
Now, I thought the IC would be 0,55, but it is calculated as (2*0,55) - 1. I guess this is the formula 2 (Nc/N) - 1. Am I right that we would use 3 instead of 2 if the manager was switching between e.g. cash, bonds and stocks?