Consider the following Information regarding the performance of a money manager in a recent month. The table represents the actual return of each sector of the manager's portfollo in column 1, the fraction of the portfolio allocated to each sector in column 2, the benchmark or neutral sector allocations in column 3, and the returns of sector indices in column 4. Actual Return. 2.5% Actual Height 0.5 0.2 0.3 tquity Senchmack Weight Index Return Bonds Cash 0.7 0.2 0.1 3% (SAP S00) 1.9 (Barclay's. Aggregate) 0.9 1.4 0.8 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
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Please answer all A , B and C
c. What was the contribution of asset allocation to relative performance? (Do not round Intermediate calculations. Round your
answer to 2 decimal places. Negative amount should be Indicated by a minus sign.)
Contribution of asset allocation
Transcribed Image Text:c. What was the contribution of asset allocation to relative performance? (Do not round Intermediate calculations. Round your answer to 2 decimal places. Negative amount should be Indicated by a minus sign.) Contribution of asset allocation
Consider the following Information regarding the performance of a money manager in a recent month. The table represents the actual
return of each sector of the manager's portfollo in column 1, the fraction of the portfolo allocated to each sector in column 2, the
benchmark or neutral sector allocations in column 3, and the returns of sector indices in column 4.
Actual Return
Actual Height
Equity
Bonds
Senchmark Welght
0.7
Index Return
3K (SEP S00)
1.9 (Barclay's Agregate)
2.5K
1.4
0.5
0.2
0.2
0.1
Cash
0.3
0.9
Required:
a-1. What was the manager's return in the month? (Do not round Intermedlate calculations. Input all amounts as positive values.
Round your answer to 2 declmal places.)
The manager's return in the month is
0-2. What was her overperformance or underperformance? (Do not round Intermedlate calculations. Input all amounts as positive
values. Round your answer to 2 decimal places.)
b. What was the contribution of security selection to relative performance? (Do not round Intermedlate calculetions. Round your
answer to 2 decimal places. Negetive emount should be Indicated by a minus sign.)
Contribution of security selection
Transcribed Image Text:Consider the following Information regarding the performance of a money manager in a recent month. The table represents the actual return of each sector of the manager's portfollo in column 1, the fraction of the portfolo allocated to each sector in column 2, the benchmark or neutral sector allocations in column 3, and the returns of sector indices in column 4. Actual Return Actual Height Equity Bonds Senchmark Welght 0.7 Index Return 3K (SEP S00) 1.9 (Barclay's Agregate) 2.5K 1.4 0.5 0.2 0.2 0.1 Cash 0.3 0.9 Required: a-1. What was the manager's return in the month? (Do not round Intermedlate calculations. Input all amounts as positive values. Round your answer to 2 declmal places.) The manager's return in the month is 0-2. What was her overperformance or underperformance? (Do not round Intermedlate calculations. Input all amounts as positive values. Round your answer to 2 decimal places.) b. What was the contribution of security selection to relative performance? (Do not round Intermedlate calculetions. Round your answer to 2 decimal places. Negetive emount should be Indicated by a minus sign.) Contribution of security selection
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