4. Instead of a passive ETF, we decided to hire an active manager whose objective is to outperform the Barclays Aggregate Index. Given what was just proposed to Advisory Board, what would be the VAM impact if during the first month of live performance the manager outperformed its benchmark by 1.2%? Show calculations.

5. Using the information in #4 above, what is the VAM impact in Allocation Tactics if our actual allocation to fixed income was 3 percentage points below policy? Show calculations.