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a) Consider the following information regarding the performance of a portfolio manager in a recent quarter. Manager's Manager's Market Weight Market weight Return Return Stocks
a) Consider the following information regarding the performance of a portfolio manager in a recent quarter. Manager's Manager's Market Weight Market weight Return Return Stocks 2% 0.70 0.60 2.5% 1% 0.20 0.30 1.2% Bonds 0.5% 0.5% Marketable securities 0.10 0.10 Required: Evaluate the performance (underperformance or overperformance) compared to benchmark (market). Identify the contributions of security selection and asset allocation to relative performance? (6 marks) b) Briefly explain the porter's 5 forces model (5 marks) c) How systematic risk is different from non-systematic risk. Give one example of each different type of risk. (4 marks) d) You are the CEO of an automobile company. You forecast that the economy is sliding into a recession. How can you adjust the company's operating leverage and financial leverage to minimize the adverse effect of the recession on your company? Please explain the reasons
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