1. Calculate the tracking error for the manager relative to the index. How successful was the manager in limiting his or her client’s unsystematic risk exposure? Explain.

Period	Manager A (%)	Index (%)
1	10.7	11.1
2	-1.4	-2.9
3	10.5	17.6
4	0.4	-0.9
5	-8.8	-3.2
6	20.2	19.2
7	-9.6	-10.3
8	4.7	5.9
9	2.9	2.1
10	17.0	18.9

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To calculate the tracking error for the manager relative to the index we first need to find the annu... View the full answer