Consider the annual returns produced by two different active equity portfolio managers (A and B) as well

Question:

Consider the annual returns produced by two different active equity managers (A and B) as well as those to the stock index with which they are both compared:

a. Did either manager outperform the index, based on the average annual return differential that he or she produced relative to the benchmark? Demonstrate.
b. Calculate the tracking error for each manager relative to the index. Which manager did a better job of limiting his or her client€™s unsystematic risk exposure?Explain.

Portfolio
A portfolio is a grouping of financial assets such as stocks, bonds, commodities, currencies and cash equivalents, as well as their fund counterparts, including mutual, exchange-traded and closed funds. A portfolio can also consist of non-publicly...