Question
Need help with this question: Fairfax is interested in examining the US equity-only performance records of two equity portfolio mangers: Zehmer Associates and Ivy Management
Need help with this question: Fairfax is interested in examining the US equity-only performance records of two equity portfolio mangers: Zehmer Associates and Ivy Management Inc. She know that they have been in business about the same length of time, and have grown at about the same rate in terms of the size of assets managed and the number of clients served. As they employ similar analytical methods, they purchase similar securities for their accounts. Other data concerning the two firms appear in Table III below:
Zehmer Associates Ivy Management Inc.
Annualized Return, Net fees 15% 16%
Annualized Risk (Standard Deviation) 13% 13%
Range of Annual Returns -5% to 34% -8% to 39%
Average Annual Portfolio 15% 85%
- Justify the hiring of Zehmer Associates as the investment manager for the US equity portion of Fairfax's $2 million savings portfolio. Base your response only on the data in Table III and the facts presented above.
- Discuss two reasons why "passive mangement" may be an appropriate investment style for the equity portion of Fairfax's savings portfolio.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started