Consider the annual returns produced by two different active equity portfolio managers (A and B) as well as those to the stock index with which they are both compared: Period Manager A Manager B Index 1 12.7 % 13.5 % 11.6 % 2 -1.6 -4.5 -2.3 3 14.9 13.2 18.9 4 0.5 2.2 -0.6 5 -7.6 -6.7 -3.5 6 24.8 24.3 21.6 7 -10.7 -12.2 -13.2 8 5.2 5.5 5.1 9 2.6 4.3 2.6 10 19.1 18.3 19.3 Did either manager outperform the index, based on the average annual return differential that he or she produced relative to the benchmark? Use a minus sign to enter negative values, if any. Do not round intermediate calculations. Round your answers to two decimal places. Manager A: % Manager B: % 's average return is less than the index and 's average exceeded that of the index. Calculate the tracking error for each manager relative to the index. Which manager did a better job of limiting his or her client's unsystematic risk exposure? Do not round intermediate calculations. Round your answers to two decimal places. Manager A: % Manager B: % did the better job of limiting the client's exposure to unsystematic risk as the difference between manager's returns and those of the index has a standard deviation
Consider the annual returns produced by two different active equity
| Period | Manager A | Manager B | Index | |||
| 1 | 12.7 | % | 13.5 | % | 11.6 | % |
| 2 | -1.6 | -4.5 | -2.3 | |||
| 3 | 14.9 | 13.2 | 18.9 | |||
| 4 | 0.5 | 2.2 | -0.6 | |||
| 5 | -7.6 | -6.7 | -3.5 | |||
| 6 | 24.8 | 24.3 | 21.6 | |||
| 7 | -10.7 | -12.2 | -13.2 | |||
| 8 | 5.2 | 5.5 | 5.1 | |||
| 9 | 2.6 | 4.3 | 2.6 | |||
| 10 | 19.1 | 18.3 | 19.3 |
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Did either manager outperform the index, based on the average annual return differential that he or she produced relative to the benchmark? Use a minus sign to enter negative values, if any. Do not round intermediate calculations. Round your answers to two decimal places.
Manager A: %
Manager B: %
's average return is less than the index and 's average exceeded that of the index.
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Calculate the tracking error for each manager relative to the index. Which manager did a better job of limiting his or her client's unsystematic risk exposure? Do not round intermediate calculations. Round your answers to two decimal places.
Manager A: %
Manager B: %
did the better job of limiting the client's exposure to unsystematic risk as the difference between manager's returns and those of the index has a standard deviation
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