Excel Questions 1) What would happen to the contribution of asset allocation to overall performance if the actual weights had been 75/12/13 instead of 70/7/23? Explain your result. 2) What would happen to the contribution of security selection to overall performance if the actual return on the equity portfolio had been 8.28% instead of 7.28% and the return on the bond portfolio had been .89% instead of 1.89%? Explain your result.
Excel Questions 1) What would happen to the contribution of asset allocation to overall performance if the actual weights had been 75/12/13 instead of 70/7/23? Explain your result. 2) What would happen to the contribution of security selection to overall performance if the actual return on the equity portfolio had been 8.28% instead of 7.28% and the return on the bond portfolio had been .89% instead of 1.89%? Explain your result.
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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Excel Questions
1) What would happen to the contribution of asset allocation to overall performance if the actual weights had been 75/12/13 instead of 70/7/23? Explain your result.
2) What would happen to the contribution of security selection to overall performance if the actual
Transcribed Image Text:1 Performance Attribution
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34567
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45
199
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Bogey
Portfolio
Component
Equity
B
Bonds
Cash
Index
S&P 500
Barclays Index
Money Market
Managed
Portfolio
Component
Equity
Bonds
Cash
Benchmark
Weight
0.60
0.30
0.10
Return on
Index
5.8100%
1.4500%
0.4800%
Return on Bogey
Actual
Return
7.2800%
1.8900%
0.4800%
Portfolio
Weight
0.70
0.07
0.23
Return on Managed
Excess Return
E
Portfolio
Return
3.4860%
0.4350%
0.0480%
3.9690%
Portfolio
Return
5.0960%
0.1323%
0.1104%
5.3387%
1.3697%
F
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