Calculate the contribution to performance of the pure sector allocation. Round your answer to two decimal place. Do not put the percentage (%) sign.
Calculate the contribution to performance of the pure sector allocation. Round your answer to two decimal place. Do not put the percentage (%) sign.
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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Transcribed Image Text:Primo Management Co. is looking at how best to evaluate the performance of its managers.
Primo has been hearing more and more about benchmark portfolios and is interested in trying
this approach. As such, the company hired Sally Jones, CFA, as a consultant to educate the
managers on the best methods for constructing a benchmark portfolio, how to choose the best
benchmark, whether the style of the fund under management matters, and what they should do
with their global funds in terms of benchmarking.
For the sake of discussion, Jones put together some comparative 2-year performance numbers
that relate to Primo's current domestic funds under management and a potential benchmark.
Style Category
weight of
Primo
Large-cap
growth
Mid-cap growth 0.15
Small-cap
growth
0.60
0.25
weight of
Benchmark
0.50
0.40
0.10
return of Primo return of Benchmark
(%)
(%)
17
23
19
14
26
17
Calculate the contribution to performance of the pure sector allocation. Round your answer to
two decimal place. Do not put the percentage (%) sign.
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