1. A fund manager has a long-term asset allocation that includes an exposure of 20% of the portfolio value to international equities. The fund manager makes the decision to include the stock AAPPL in the portfolio. On average, evidence suggests that the long-term asset allocation decision will have a ____"higher"_____ contribution to the overall performance of the portfolio relative to the decision to hold AAPPL as part of the Australian equity exposure

why this is "higher contribution to overall performance"?

2.

A fund manager has a long-term asset allocation that includes an exposure of 25% of the portfolio value to Australian equities. The fund manager makes the decision to include the stock BHP in the portfolio. Which of the following is consistent with the extant evidence suggested in the finance academic literature?

Select one: On average, the decision to hold an individual stock such as BHP in the portfolio will have a LOWER contribution to the overall performance of the portfolio relative to the long-term asset allocation decision.

why this is lower?