Med BM Active Risk Factor B Mfg Fin Other 1.2 0.1 0.8 0.1 1 0.2 0.5 0.3 Risk Factor Mfg Fin Other Factor/Sector Index Covariance Matrix Risk Factor Mfg Fin Other 400 100 100 0 100 600 100 0 100 100 500 0 0 0 0 300 b. The tracking error of the Med portfolio, relative to the BM portfolio is 9.4%. Decompose the Mgd fund's active risk of 9.4% into two sources: 1) Common risk exposures stemming from active positions on the four common factors, as a group 2) The fund's active specific risk. Med BM Active Risk Factor B Mfg Fin Other 1.2 0.1 0.8 0.1 1 0.2 0.5 0.3 Risk Factor Mfg Fin Other Factor/Sector Index Covariance Matrix Risk Factor Mfg Fin Other 400 100 100 0 100 600 100 0 100 100 500 0 0 0 0 300 b. The tracking error of the Med portfolio, relative to the BM portfolio is 9.4%. Decompose the Mgd fund's active risk of 9.4% into two sources: 1) Common risk exposures stemming from active positions on the four common factors, as a group 2) The fund's active specific risk