Explain why backward-looking tracking error has limitations for estimating a portfolio's future tracking error
What will be an ideal response?
A portfolio's backward-looking tracking error is computed based on actual active returns and reflect the portfolio manager's decisions during the observation period with respect to the factors that affect tracking error. Consequently, one limitation with using backward-looking tracking error in bond portfolio management is that it does not reflect the effect of current decisions by the portfolio manager on the future active returns and hence the future tracking error that may be realized. Another limitation is that the backward-looking tracking error will have little predictive value and can be misleading regarding portfolio risks going forward.
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______ monitor group dynamics—intervening when necessary—and help teams utilize effective interpersonal skills to ensure that outcomes are achieved effectively and efficiently
A. Arbitrators B. Group process consultants C. Lead negotiators D. Parliamentarians
The Federal Reserve Board is an example of an economic planner
Indicate whether the statement is true or false