Exercise 16.3.2 (1) Repeat the calculations in Fig. 16.1 but this time record the weekly tracking errors instead of the cumulative costs. Verify that the following numbers result:

Weeks to Net Tracking expiration borrowing (B ) error 4 25,160,090 —

3 30,552,305 171,622 2 42,005,470 367 1 41,428,180 203,874 0 50,000,000 −125,459

(This alternative view looks at how well the call is hedged.) (2) Verify that the FVs at expiration of the tracking errors sum to $251,235.