The manager of Quantitative International Fund ('Quantitative') uses the EAFE index as a benchmark. Last year's performance for the fund and the benchmark were as follows: Quantitative's Quantitative's Weight Return EAFE Return on Currency Weight Equity Index Appreciation E1/EO -1 0.20 8% 5% 0.35 5% -5% 0.45 12% 10% Europe Australasia Far East 10% 0.25 0.15 0.60 8% 13% (10%) Required: i. Calculate Quantitative's overall performance and the performance of the EAFE benchmark index: Calculate Quantitative's currency selection return contribution; iii. Calculate Quantitative's country selection return contribution, and iv. Calculate Quantitative's stock selection return contribution. ii. (10%) (10%) (10%) b) Discuss the reasons for the under-or over-performance of the Quantitative International Fund in part a). (20%) c) Explain how an investor can diversify her portfolio by investing internationally. Critically evaluate the risks and benefits of investing in emerging markets. (40%)