A Client with a wealth of £100 000 wants her wealth managed by allocating 60% in Bonds and 40% in Equities. The manger allocates the client’s wealth accordingly, but actively manages the Equity fund. The Bonds fund performs in line with the benchmark which grows by 4.5%. The Equity fund grows to a value £42 300. The FTSE 100 Index increases from 6750 to 7255. Find the growth rates of the Equity benchmark and the managed Equity fund. Then, explain how successful was the manager’s decision to actively manage the equity fund.
A Client with a wealth of £100 000 wants her wealth managed by allocating 60% in Bonds and 40% in Equities. The manger allocates the client’s wealth accordingly, but actively manages the Equity fund. The Bonds fund performs in line with the benchmark which grows by 4.5%. The Equity fund grows to a value £42 300. The FTSE 100 Index increases from 6750 to 7255. Find the growth rates of the Equity benchmark and the managed Equity fund. Then, explain how successful was the manager’s decision to actively manage the equity fund.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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A Client with a wealth of £100 000 wants her wealth managed by allocating 60% in Bonds and 40% in Equities. The manger allocates the client’s wealth accordingly, but actively manages the Equity fund. The Bonds fund performs in line with the benchmark which grows by 4.5%. The Equity fund grows to a value £42 300. The FTSE 100 Index increases from 6750 to 7255. Find the growth rates of the Equity benchmark and the managed Equity fund. Then, explain how successful was the manager’s decision to actively manage the equity fund.
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