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:

Operating Assets

Assets used in the day-to-day operations of a business to generate revenue, excluding investment and idle assets.

Controllable Margin

A measure of profitability that represents the amount of income over which managers have control, usually after direct costs have been deducted from revenues.

ROI

Return on Investment, a measure used to evaluate the financial performance of an investment by dividing the benefit (or return) of the investment by its cost.

Investment Center

A business unit within an organization that is responsible not only for generating profits but also for managing its own investments and capital.