Country U.K. Japan U.S. Germany Required: Weight In MSCI Index. 0.15 0.30 0.45 0.10 Manager's Weight 0.30 0.10 0.40 0.20 Manager's Return in Country 20% 15 10 5 Return of Stock Index. for That Country 12% 15 14 12
Country U.K. Japan U.S. Germany Required: Weight In MSCI Index. 0.15 0.30 0.45 0.10 Manager's Weight 0.30 0.10 0.40 0.20 Manager's Return in Country 20% 15 10 5 Return of Stock Index. for That Country 12% 15 14 12
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
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
Country
U.K.
Japan
U.S.
Germany
Weight In
MSCI Index
0.15
0.30
0.45
0.10
Added
value
Manager's
Weight
0.30
Answer is complete but not entirely correct.
0.51
0.10
0.40
0.20
Contribution of country
allocation
%
Manager's Return
in Country
20%
Required:
a. Calculate the total value added of all the manager's decisions this period. (Do not round intermediate calculations. Round your
answer to 2 decimal places. Negative amount should be indicated by a minus sign.)
15
10
5
0.11
Answer is complete but not entirely correct.
Return of Stock Index
for That Country
12%
b. Calculate the value added (or subtracted) by her country allocation decisions. (Do not round intermediate calculations. Round your
answer to 2 decimal places. Negative amount should be indicated by a minus sign.)
15
14
12
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