Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Consider the following information regarding the performance of a money manager in a recent month. The table represents the actual return of each sector of

Consider the following information regarding the performance of a money manager in a recent month. The table represents the actual return of each sector of the managers portfolio in column 1, the fraction of the portfolio allocated to each sector in column 2, the benchmark or neutral sector allocations in column 3, and the returns of sector indices in column 4. Actual Return Actual Weight Benchmark Weight Index Return Equity 2.4% 0.6 0.7 2.9% (S&P 500) Bonds 1.4 0.3 0.2 1.6 (Salomon Index) Cash 0.5 0.1 0.1 0.5 a. What was the managers return in the month? What was her overperformance or underperformance?(Round your answer to 2 decimal places. Input all amounts as positive values. Do not round intermediate calculations. Omit the "%" sign in your response.) The managers return in the month is % % b. What was the contribution of security selection to relative performance? (Round your answer to 2 decimal places. Do not round intermediate calculations. Negative amount should be indicated by a minus sign. Omit the "%" sign in your response.) Contribution of security selection: % c. What was the contribution of asset allocation to relative performance? (Do not round intermediate calculations. Round your answer to 2 decimal places. Negative amount should be indicated by a minus sign. Omit the "%" sign in your response.) Contribution of asset allocation: %

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered 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

Students also viewed these Finance questions