Answered step by step
Verified Expert Solution
Question
1 Approved Answer
A global equity manager is assigned to select stocks from a universe of large stocks throughout the world. The manager will be evaluated by comparing
A global equity manager is assigned to select stocks from a universe of large stocks throughout the world. The manager will be evaluated by comparing her returns to the return on the MSCI World Market Portfolio, but she is free to hold stocks from various countries in whatever proportions she finds desirable. Results for a given month are contained in the following table: Manager's Weight 0.46 Country U.K. Japan U.S. Germany Weight In MSCI Index 0.23 0.36 0.37 0.04 Manager's Return in Country 21% 14 10 6 Return of Stock Index for That Country 13% 14 12 13 0.18 0.28 0.08 a. Calculate the total value added of all the manager's decisions this period. (Do not round intermediate calculations. Round your answer to 2 decimal places. Negative amount should be indicated by a minus sign.) Added value % b. Calculate the value added (or subtracted) by her country allocation decisions. (Do not round intermediate calculations. Round your answer to 2 decimal places. Negative amount should be indicated by a minus sign.) Contribution of country allocation % c. Calculate the value added from her stock selection ability within countries. (Do not round intermediate calculations. Round your answer to 2 decimal places. Negative amount should be indicated by a minus sign.) Contribution of stock selection %
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started