Dear David/Nicole,

On the GARP book of FOUNDATION(2015 edition) sample question I got confused in question no. 2 which is on tracking error. The question is as follows.

Benchmark return Fund returns

9.00% 1.00%

7.00% 3.00%

7.00% 5.00%

5.00% 4.00%

2.00% 1.50%

what is the tracking error of the portfolio?

A.0.09%

B.1.10%

C.3.05%

D.4.09%

I calculated the standard deviation using my calculator then I got volatility of benchmark is 2.3664 and volatility of fund return is 1.496. After using the formula I got -0.8704. Am I missing something here? Is there any wrong step did I take? Please help me in these question if possible. Sorry for trouble.

Thank you

On the GARP book of FOUNDATION(2015 edition) sample question I got confused in question no. 2 which is on tracking error. The question is as follows.

Benchmark return Fund returns

9.00% 1.00%

7.00% 3.00%

7.00% 5.00%

5.00% 4.00%

2.00% 1.50%

what is the tracking error of the portfolio?

A.0.09%

B.1.10%

C.3.05%

D.4.09%

I calculated the standard deviation using my calculator then I got volatility of benchmark is 2.3664 and volatility of fund return is 1.496. After using the formula I got -0.8704. Am I missing something here? Is there any wrong step did I take? Please help me in these question if possible. Sorry for trouble.

Thank you

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