$10.$a$.$Compute the tracking error from the following information:

Month

Portfolio A$$s Return $(\%)$

Benchmark Index Return $(\%)$

January

$2\mathrm{.}15$

$1\mathrm{.}65$

February

$0\mathrm{.}89$

$0\mathrm{.}10$

March

$1\mathrm{.}15$

$0\mathrm{.}52$

April

$0\mathrm{.}47$

$0\mathrm{.}60$

May

$1\mathrm{.}71$

$0\mathrm{.}65$

June

$0\mathrm{.}10$

$0\mathrm{.}33$

July

$1\mathrm{.}04$

$2\mathrm{.}31$

August

$2\mathrm{.}70$

$1\mathrm{.}10$

September

$0\mathrm{.}66$

$1\mathrm{.}23$

October

$2\mathrm{.}15$

$2\mathrm{.}02$

November

$1\mathrm{.}38$

$0\mathrm{.}61$

December

$0\mathrm{.}59$

$1\mathrm{.}20$

b$.$Would the tracking error computed in part a be 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 $25\mathrm{.}1$ and $25\mathrm{.}2.$ What can you say about the investment management strategy pursued by this portfolio manager?