A global equity manager is assigned to select stocks from a universe of large stocks throughout the world. The manager will be evaluated by comparing her returns to the return on the MSCI World Market Portfolio, but she is free to hold stocks from various countries in whatever proportions she finds desirable. Results for a given month are contained in the following table: Weight In MSCI Index Manager's Manager's Return in Return of Stock Index Country U.K. Weight Country 0.15 0.30 20% for That Country 12% Japan 0.30 0.10 15 15 U.S. 0.45 0.40 10 14 Germany 0.10 0.20 5 12 Required:
A global equity manager is assigned to select stocks from a universe of large stocks throughout the world. The manager will be evaluated by comparing her returns to the return on the MSCI World Market Portfolio, but she is free to hold stocks from various countries in whatever proportions she finds desirable. Results for a given month are contained in the following table: Weight In MSCI Index Manager's Manager's Return in Return of Stock Index Country U.K. Weight Country 0.15 0.30 20% for That Country 12% Japan 0.30 0.10 15 15 U.S. 0.45 0.40 10 14 Germany 0.10 0.20 5 12 Required:
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
Related questions
Question
DO NOT GIVE ME THE WRONG ANSWER
a)Calculate the total value added of all the manager’s decisions this period.
Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Negative amount should be indicated by a minus sign.
b)Calculate the value added (or subtracted) by her country allocation decisions.
Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Negative amount should be indicated by a minus sign.
c)Calculate the value added from her stock selection ability within countries.
Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Negative amount should be indicated by a minus sign.
Transcribed Image Text:A global equity manager is assigned to select stocks from a universe of large stocks throughout the world. The manager will be
evaluated by comparing her returns to the return on the MSCI World Market Portfolio, but she is free to hold stocks from various
countries in whatever proportions she finds desirable. Results for a given month are contained in the following table:
Weight In
MSCI Index
Manager's
Manager's Return in Return of Stock Index
Country
U.K.
Weight
Country
0.15
0.30
20%
for That Country
12%
Japan
0.30
0.10
15
15
U.S.
0.45
0.40
10
14
Germany
0.10
0.20
5
12
Required:
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