The Tracking Error of an Optimized Portfolio Can Be Expressed

question 13

Multiple Choice

The tracking error of an optimized portfolio can be expressed in terms of the ____________ of the portfolio, and thus reveals ____________.

• A) return; portfolio performance
• B) total risk; portfolio performance
• C) beta; portfolio performance
• D) beta; benchmark risk
• E) relative return; benchmark risk

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Definitions:

Real Assets

Assets that have intrinsic value due to their substance and physical properties, such as real estate, commodities, or natural resources.

Current Account

A component of a country's balance of payments that measures the trade of goods and services, net earnings on investments, and transfer payments.

Goods Exports

The act of sending domestically produced goods to another country for sale or trade.

Current Account

A country's transactions with the rest of the world, including goods, services, income, and current transfers.