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Question 4 (Essential to cover) The fund F has been investing in stocks and bonds. Given their strategy, an appropriate bogey portfolio is B. The
Question 4 (Essential to cover)
The fund F has been investing in stocks and bonds. Given their strategy, an appropriate bogey portfolio is B. The performance and weights of F and B over the last year are given in the table below.
Asset class | wF | wB | rF | rB |
Stocks | 0.7 | 0.8 | 8% | 11% |
Bonds | 0.3 | 0.2 | 7% | 5% |
a. To what would you attribute the performance of F relative to B in the stock category? b. To what would you attribute the performance of F relative to B in the bonds category? c. To what would you attribute the total performance of F relative to B?
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