The cost of active management is the coefficient σER and it is sometimes referred to as
A) market timing.
B) reward for risk.
C) excess reward.
D) excess risk.
E) tracking error.

Question

Quizplus · Accepted Answer

The cost of active management, represented by the coefficient σER, is often referred to as tracking error, which measures the deviation of a portfolio's returns from its benchmark.

The Cost of Active Management Is the Coefficient σER and It