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Options
- A
Arbitrage error
-
Tracking error
Correct answer
- C
Systematic risk
- D
Investment objective
Why this is the answer
Tracking error refers to the difference between the performance of an index fund and its benchmark index. It occurs due to factors like transaction costs, fund management fees, or differences in how the fund and the index are constructeD) It is the key reason why an index fund’s performance can be slightly better or worse than its benchmark.
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