Information ratio (IR) is used in conjunction with the Information coefficient (IC) and Breadth of the strategy (BR). IC is the measure that tracks the accuracy of the forecast with the actual result. The higher accuracy leads to higher IC, which results in a higher IR. On the other hand, BR is the number of bets. In our scenario, the firm places 12 bets a year, so our BR equals 12.

To calculate IR, we use the formula:

$$\text{IR} = \text{IC} \times \sqrt{\text{BR}}$$

$`$0.83` = \text{IC} * \sqrt{12}

$`$0.83` = \text{IC} * 3.46 $$\{\text{IC}\} = \frac{0.83}{3.46} = 0.24$$

William needs to produce an IC of 0.24 to reach an Information Ratio of 0.83, assuming 12 bets a year.