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Use the table below showing the return of a portfolio and its target benchmark for the past 8 quarters. What is the tracking error of
- Use the table below showing the return of a portfolio and its target benchmark for the past 8 quarters. What is the tracking error of the portfolio? What type of manager would you say this manager is based on the level of the tracking error?
| Quarter | rP | rI |
| 1 | 8.5% | 5.0% |
| 2 | 7.0% | 8.0% |
| 3 | 10.0% | 12.0% |
| 4 | 1.5% | 2.0% |
| 5 | 14.0% | 15.0% |
| 6 | 13.0% | 10.0% |
| 7 | 2.0% | 3.0% |
| 8 | 7.0% | 8.0% |
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Financial Management For Public, Health, And Not-for-Profit Organizations
Authors: Steven A. Finkler, Daniel L. Smith, Thad D. Calabrese, Robert M. Purtell
6th Edition
150639681X, 978-1506396811
