In Equity Portfolio Management,tracking Error Occurs When

question 3

Multiple Choice

In equity portfolio management,tracking error occurs when

• A) The managed portfolio outperforms the benchmark portfolio.
• B) The managed portfolio under performs the benchmark portfolio.
• C) The return volatility of the managed portfolio is positively correlated with the return volatility of the benchmark portfolio.
• D) The return volatility of the managed portfolio is negatively correlated with the return volatility of the benchmark portfolio.
• E) The return volatility of the managed portfolio is not correlated with the return volatility of the benchmark portfolio.

---

Definitions:

Promissory Estoppel

A legal principle that prevents a party from withdrawing a promise made to another party if the latter has reasonably relied on that promise to their detriment.

Software Power

The capability and effectiveness of software in performing its intended functions and tasks efficiently.

Reduction in Force

A corporate strategy involving the reduction of a company's workforce to improve financial performance or adapt to changing market conditions.

Promissory Estoppel

A legal principle that prevents a party from withdrawing a promise that another party has reasonably and substantially relied on, even if no formal contract exists.