1. You and a prospective client are considering the measurement of investment performance, particularly with respect to international portfolios for the past 5 years. The data you discussed are presented in the following table:

International Manager or Index Total Return Country and Security Return Currency Return Manager A –6.0% 2.0% –8.0%

Manager B –2.0 –1.0 –1.0 International Index –5.0 0.2 –5.2

a. Assume that the data for manager A and manager B accurately reflect their investment skills and that both managers actively manage currency exposure. Briefly describe one strength and one weakness for each manager.

b. Recommend and justify a strategy that would enable your fund to take advantage of the strengths of each of the two managers while minimizing their weaknesses.