Question: QUESTION THREE a) The table below provides returns on a portfolio along with returns for the corresponding benchmark index for the past eight quarters. The

QUESTION THREE a) The table below provides returns on a portfolio along with returns for the corresponding benchmark index for the past eight quarters. The table also provides the difference between portfolio returns and the benchmark index, the average of these differences over the past eight quarters and the standard deviation of these differences. Period Portfolio Index Difference 0.057 0.035 -0.022 0.042 0.028 -0.014 -0.035 0.013 0.048 0.026 0.017 -0.009 DJOUAWN -0.004 -0.001 0.003 0.015 -0.012 -0.027 0.116 0.086 -0.03 0.085 0.056 -0.029 Average 0.03775 0.02775 -0.01000 Standard deviation 0.04846 0.03159 0.02603 What is the annualized tracking error for this period? Given your estimate of the tracking error, classify the portfolio's investment style. (15 marks)

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