Tracking Error Is Defined as

question 20

Multiple Choice

Tracking error is defined as

• A)the difference between the returns on the overall risky portfolio versus the benchmark return
• B)the variance of the return of the benchmark portfolio
• C)the variance of the return difference between the portfolio and the benchmark
• D)the variance of the return of the actively-managed portfolio
• E)none of the above.

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Definitions:

Incoming Cash

Money that is received by a business or individual, originating from various sources like sales, investments, loans, or other income.

Outgoing Cash

Money that is spent or disbursed by a business, including expenses, purchases, and other payments.

Manufacturing Business

A type of business that changes basic inputs into products that are sold to individual customers.

General Motors

A multinational corporation headquartered in the United States that designs, manufactures, markets, and distributes vehicles and vehicle parts.