Mrs. Sindy manages a portfolio composed of the three stocks presented in the table below. The fraction of the portfolio allocated to each of these companies is presented in the actual weight column.

1. What is Mrs. Sindys return on her portfolio? *

a. 8.30%

b. 8.60%

c. 10.20%

d. 9.35%

e. None of the above

2. By how much does Mrs. Sindy over or underperform the market index? *

a. Underperformance by 0.75%

b. Overperformance by 0.75%

c. Underperformance by 1.90%

d. Overperformance by 1.90%

e. None of the above

3. Which of the following statements is CORRECT? *

a. The contribution of security selection and that of asset allocation are respectively equal to 1.6% and 0.85%

b. The contribution of asset allocation and that of security selection are respectively equal to 1.05% and 0.85%

c. The contribution of security selection and that of asset allocation are respectively equal to 0.3% and 1.6%

d. The contribution of asset allocation and that of security selection are respectively equal to 0.3% and 1.05%

e. None of the above

Actual return Index return Actual weight Benchmark weight 0.35 0.3 12% 10% Apple & Bros. Orange Co. Fruits Inc. -1% 0.3 0.4 2% 18% 0.35 0.3 15%