FUNDS

1. Consider the annual returns produced by a passive equity portfolio manager as well as those of the stock index with which they are both compared. What is the tracking error for the manager relative to the index?

Year

Manager (%)

Index

(%)

1

12.8

11.8

2

-2.1

-2.2

3

15.6

18.9

4

0.8

-0.5

5

-7.9

-3.9

6

23.2

21.7

7

-10.4

-13.2

8

5.6

5.3

9

2.3

2.4

10

19.0

19.7

2. What is the CAPE, if the Share Price is $45.20?

Year

Earnings Per Share

1

2.20

2

1.90

3

1.80

4

1.90

5

2.40

6

2.10

7

2.70

8

1.80

9

1.20

10

2.30