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:

Parallel Forms

A method of reliability assessment in psychometrics where two different versions of a test are used to measure the same construct, to check for consistency.

Interrater

Relates to the degree of agreement among independent observers or raters evaluating the same phenomenon.

Predictive Validity

The extent to which a score or measurement can accurately predict future performance or behavior.

Concurrent Validity

A measure of how well a particular test correlates with a previously validated measure.