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eBook Problem 1 1 - 0 8 Shown below are the investment weights for the securities held in four different portfolios: three mutual funds and
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Problem
Shown below are the investment weights for the securities held in four different portfolios: three mutual funds and the benchmark index that each of those funds uses.
Percentage Security Investment Weight:
Security Benchmark Index
Fund X
Fund Y
Fund Z
Calculate the active share AS measure for Fund X Fund Y and Fund Z relative to the benchmark index. Do not round intermediate calculations. Round your answers to one decimal place.
Fund X:
Fund Y:
Fund Z:
Using these AS calculations, indicate which fund is the most likely to be considered: i a passive index fund, ii a closet or enhanced index fund, and iii an actively managed concentrated stockpicking fund. Explain the reason for your classification.
Fund X is considered
Select
because, it
Select
in the investment weights of holdings relative to the benchmark index.
Fund Y is considered
Select
because, it is
Select
concentrated than the benchmark and has
Select
holdings and
Select
investment positions.
Fund Z is considered
Select
because its security holdings come closer to matching the benchmark,
Select
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