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 presents the actual return of each sector

image text in transcribed

image text in transcribed

Consider the following information regarding the performance of a money manager in a recent month. The table presents the actual return of each sector of the manager's 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 indexes in column (4). (1) (2) (3) Actual Actual Benchmark Return Weight Weight (4) Index Return Equity Bonds Cash 3.4% 0.50 0.40 2.3 0.30 0.40 4.2% (S&P 500) 3.1 (Aggregate Bond Index) 2.4 0.20 0.20 2.4 a-1. What was the manager's return in the month? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Manager's return % a-2. What was her over or underperformance? (Input the value as positive value. Do not round intermediate calculations. Round your answer to 2 decimal places.) Underperformance % b. What was the contribution of security selection to relative performance? (Negative value should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to 2 decimal places.) 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.) Contribution of asset allocation %

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_2

Step: 3

blur-text-image_3

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

Personal Financial Planning

Authors: Randy Billingsley, Lawrence J. Gitman, Michael D. Joehnk

14th edition

978-1305887725, 1305887727, 1305636619, 978-1305636613

More Books

Students also viewed these Finance questions