Compute the tracking error from the following information:

Month 2001	Portfolio As Return (%)	Lehman Aggregate Bond Index Return (%)
January	3.15	2.65
February	1.89	0.10
March	1.15	0.52
April	0.47	1.60
May	1.71	0.65
June	1.10	0.33
July	1.04	2.31
August	1.70	1.10
September	0.66	1.23
October	2.15	2.02
November	2.38	1.61
December	0.59	2.20

(b) Is the tracking error computed in part (a) a backward-looking or forward-looking tracking error? Why?

(c) Compare the tracking error found in part (a) to the tracking error found for Portfolios A and B in Exhibits 25-1 on page 555 and 25-2 on page 556. What can you say about the investment management strategy pursued by this portfolio manager?

please show calculations and formulas