Question
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 | 2.3% | 0.6 | 0.4 |
Bonds | 1.2 | 0.2 | 0.3 |
Cash | 0.7 | 0.2 | 0.3 |
a-1. What was the managers return in the month? (Do not round intermediate calculations. Input all amounts as positive values. Round your answer to 2 decimal places.)
a-2. What was her overperformance or underperformance? (Do not round intermediate calculations. Input all amounts as positive values. Round your answer to 2 decimal places.)
b. What was the contribution of security selection to relative performance? (Do not round intermediate calculations. Round your answer to 2 decimal places. Negative amount should be indicated by a minus sign.)
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.)
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