Question
Consider the following performance for a money manager for the 2016 calendar year. The table shows the actual return by sector for the managers portfolio
Consider the following performance for a money manager for the 2016 calendar year. The table shows the actual return by sector for the managers portfolio in the first column, the fraction of the portfolio allocated to each sector in the second column, the benchmark sector allocations in the third column, and the benchmark returns for each sector (index returns) in the fourth column. Actual Return Actual Weight Benchmark Weight Index Return Equity 12% .5 .6 10% (S&P 500) Bonds 4% .3 .3 2.5% (Salomon Index) Cash 0.5% .2 .1 0.5% a) What was the managers return for 2016?
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