Given a Portfolio Return of 5%,10%,-2% and 4%,and a Tracking $0.0005$

question 6

Multiple Choice

Given a portfolio return of 5%,10%,-2% and 4%,and a tracking portfolio of 6%,7%,2% and 5%,calculate the average absolute tracking performance of the portfolio.

• A) \( 0.0005 \)
• B) \( 0.0066 \)
• C) \( 0.0125 \)
• D) \( 0.0258 \)

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Definitions:

Demand

The quantity of a good or service that consumers are willing and able to purchase at a given price.

Elastic

A characteristic of supply or demand that indicates a high sensitivity to changes in price.

Inelastic

Describes a situation where a change in price leads to a relatively small change in the quantity demanded or supplied.

Market Efficiency

A scenario where all existing information is entirely accounted for in the prices of assets, rendering it impossible to consistently outperform the market average in terms of returns.