Consider the annual returns produced by two different active equity portfolio managers (A and B) as...
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Consider the annual returns produced by two different active equity portfolio managers (A and B) as well as those to the stock index with which they are both compared: Period 1 2 3 4 5 6 7 8 9 10 % % % Manager A 12.1% -2.9 14.0 0.7 -7.0 23.7 -11.4 % 5.3 3.8 19.1 Manager B 12.8% -3.5 13.3 2.4 -6.5 25.8 -11.4 a. Did either manager outperform the index, based on the average annual return differential that he or she produced relative to the benchmark? Use a minus sign to enter negative values, if any. Do not round intermediate calculations. Round your answers to two decimal places. Manager A: Manager B: -Select- ✓ 's average return is less than the index and -Select- ✓'s average exceeded that of the index. b. Calculate the tracking error for each manager relative to the index. Which manager did a better job of limiting his or her client's unsystematic risk exposure? Do not round intermediate calculations. Round your answers to two decimal places. Manager A: Manager B: -Select- ✓ did the better job of limiting the client's exposure to unsystematic risk as the difference between manager's returns and those of the index has a -Select-standard deviation. -Select- larger smaller 5.2 3.8 18.8 Index 11.2% -2.1 18.6 -0.8 -3.3 21.0 -13.6 5.3 2.3 19.6 Consider the annual returns produced by two different active equity portfolio managers (A and B) as well as those to the stock index with which they are both compared: Period 1 2 3 4 5 6 7 8 9 10 % % % Manager A 12.1% -2.9 14.0 0.7 -7.0 23.7 -11.4 % 5.3 3.8 19.1 Manager B 12.8% -3.5 13.3 2.4 -6.5 25.8 -11.4 a. Did either manager outperform the index, based on the average annual return differential that he or she produced relative to the benchmark? Use a minus sign to enter negative values, if any. Do not round intermediate calculations. Round your answers to two decimal places. Manager A: Manager B: -Select- ✓ 's average return is less than the index and -Select- ✓'s average exceeded that of the index. b. Calculate the tracking error for each manager relative to the index. Which manager did a better job of limiting his or her client's unsystematic risk exposure? Do not round intermediate calculations. Round your answers to two decimal places. Manager A: Manager B: -Select- ✓ did the better job of limiting the client's exposure to unsystematic risk as the difference between manager's returns and those of the index has a -Select-standard deviation. -Select- larger smaller 5.2 3.8 18.8 Index 11.2% -2.1 18.6 -0.8 -3.3 21.0 -13.6 5.3 2.3 19.6
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a To determine whether either manager outperformed the index we need to calculate the average annual return differential for each manager relative to ... View the full answer
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The Legal Environment Today Summarized Case Edition
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8th Edition
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