Question: 7. a. What does the marginal contribution to tracking error mean? b. Suppose that the marginal contribution to tracking error for some factor is negative.

7.

a. What does the marginal contribution to tracking error mean?

b. Suppose that the marginal contribution to tracking error for some factor is negative. What does that mean?

c. Why is the marginal contribution to tracking error a useful measure for a portfolio manager?

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