Assume that you are in charge of a pension fund for a large cooperation. The cooperation allocates its fund to 200 different asset managers. Explain how you should measure the performance of these asset managers and what risk measure seems most appropriate to do so. How would your answer change if the cooperation was small and used only 1 asset manager?

Task II

Two companies A and B have ROE 10% and 11%, respectively. The valuation of the two companies is in the table below:

Table 1. Valuation of A and B

Company: A
Earnings per share	£0.39
Dividend per share	£0.13
Share price	£2.41
Number of shares	1,000,000
Company: B
Earnings per share	£0.33
Dividend per share	£0.18
Share price	£2.27
Number of shares	400,000

Calculate the sustainable growth rate for both A and B. Using the constant-growth dividend model, estimate the share price for both A and B. You may use the same growth rate that you calculated above and also assume a market capitalization rate of 13%. How your results will change if the forecasted growth for both companies is 14%? Comment on your results.