Answer the below questions.
(a) Compute the tracking error from the following information:

(b) Is the tracking error computed in part (a) a backward-looking or forward-looking tracking error?
(c) Compare the tracking error found in part (a) to the tracking error found for Portfolios A and B in Exhibits 25-1 and 25-2. What can you say about the investment management strategy pursued by this portfolio manager?

Month 2001 January February March April May June July August September October November December Portfolio A's Return (%) 2.15 0.89 1.15 -0.47 1.71 0.10 1.04 2.70 0.66 2.15 1.38 -0.59 Lehman Aggregate Bond Index Retum (%) 1.65 -0.10 0.52 -0.60 0.65 0.33 2.31 1.10 1.23 2.02 -0.61 1.20