What sort of benchmark relative tracking error be preferred

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Problem 1: An endowment fund is looking for an active manager who will add value to its index, but also track the benchmark's performance over time without making any large index relative bets. What sort of benchmark relative tracking error would be preferred by the endowment given this mandate?

Group of answer choices

Option 1: No tracking error.

Option 2: Low tracking error.

Option 3: High tracking error.

Reference no: EM132988420

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