Question: (a)Explain the differences between Passively Managed and Actively Managed investment funds with reference to turnover ratio and tax efficiency? Why does actively managed funds have

(a)Explain the differences between Passively Managed and Actively Managed investment funds with reference to turnover ratio and tax efficiency? Why does actively managed funds have a higher tracking error than passive funds?

(b)Suppose that there are many stocks in the security market and that the characteristics of stocks X and Y are given as follows-

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