What is tracking error?
Answer to relevant QuestionsExplain why backward-looking tracking error has limitations for estimating a portfolio’s future tracking error. What does a Barclays Capital Liquidity CostScore of 1.2 mean? What is meant by constraint-tolerant investing? Why is there greater risk in a multi-periodimmunization strategy than a cash flow matching strategy? Answer the below questions. (a)What are the difficulties of following aduration-matched strategy for hedgingthe interest-rate risk of a defined benefitpension plan? (b)How can interest-rate derivatives be used in abond ...
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