Question
In a particular year, a mutual fund earned its return by making the following investments Weight Return Bonds 20 % 5 % Stocks 80 %
In a particular year, a mutual fund earned its return by making the following investments
|
| Weight | Return | ||
| Bonds | 20 | % | 5 | % |
| Stocks | 80 | % | 0 | % |
A bogey portfolio earned its return by making the following investments:
|
| Weight | Return | ||||
| Bonds (Lehman Brothers Index) | 50 | % | 5 | % |
| |
| Stocks (S&P 500 Index) | 50 | % | -1 | % |
| |
- (3 points) What is the return of the mutual fund? What is the return of the bogey portfolio? Did the mutual fund outperform or underperform the bogey portfolio?
- (3 points) What is the contribution of asset allocation to the mutual funds underperformance or overperformance?
- (3 points) What is the contribution of security selection to the mutual funds underperformance or overperformance?
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Populists Plungers And Progressives
Authors: Cedric B. Cowing
1st Edition
0691621993, 978-0691621999
