Answered step by step
Verified Expert Solution
Link Copied!

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:

image text in transcribedimage text in transcribed

Country U.K. Japan U.S. Germany Weight In MSCI Index 0.17 0.3 0.43 0.1 Manager's Weight 0.34 0.2 0.34 0.12 Manager's Return in Country 20% 15 10 5 Return of Stock Index for That Country 12% 15 14 12 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

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Management Theory And Practice

Authors: Prasanna Chandra

8th Edition

0071078401, 978-0071078405

More Books

Students also viewed these Finance questions

Question

What would you do if the bullies were in your classes?

Answered: 1 week ago

Question

b. Where did they come from?

Answered: 1 week ago