Question: Tracking Error Fund Benchmark Active Dev from Squared Period Return Return Return Mean Deviation 9.5010.00 4.50 5.00 -5.00-125-1 4 9.50 10.00-0. 4.50 5.00 6 -2.50

Tracking Error Fund Benchmark Active Dev from Squared Period Return Return Return Mean Deviation 9.5010.00 4.50 5.00 -5.00-125-1 4 9.50 10.00-0. 4.50 5.00 6 -2.50 5.00 2.5 Sum Mean o. Variance 2 STDEV 2. a.) What is the tracking error for this portfolio? b.) Interpret your answer c.) Suppose there is another portfolio with an alpha (mean active return) of 0.75 and a tracking error of 1.75.. How might you choose between the two? Assume that the only relevant data are the alpha and the tracking error

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