The cost of active management is the coefficient sER 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 is referred to as tracking error, which measures the standard deviation of the difference between the returns of the managed portfolio and the benchmark.  The other choices do not accurately describe the cost of active management.

The Cost of Active Management Is the Coefficient SER and It