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:

Going-concern Assumption

An accounting principle that assumes a company will continue to operate for the foreseeable future, not liquidate or reduce its operations significantly.

Operating

Pertaining to the ongoing, day-to-day activities necessary for an entity to function, including production, sales, and administrative tasks.

Business Ownership

Business Ownership entails the possession, control, and responsibility over a business entity, including rights to its assets and liabilities.

Corporation

A legal entity that is separate and distinct from its owners, offering Limited liability to its shareholders, and having the ability to raise capital through issuing stock.