The table presents the actual return of each sector of the manager's portfolio 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 indexes in column (4). 1 2 2 4 Actual Weight Actual Return Benchmark Weight Benchmark Return Stocks 70% 7.8% 60% 13.2% Bonds 30% 5.3% 40% 7.5% What is the contribution of security selection to relative performance? Make sure to use the negative sign if your answer is negative!
The table presents the actual return of each sector of the manager's portfolio 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 indexes in column (4). 1 2 2 4 Actual Weight Actual Return Benchmark Weight Benchmark Return Stocks 70% 7.8% 60% 13.2% Bonds 30% 5.3% 40% 7.5% What is the contribution of security selection to relative performance? Make sure to use the negative sign if your answer is negative!
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The table presents the actual return of each sector of the manager's portfolio 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 indexes in column (4).
| 1 | 2 | 2 | 4 | |
| Actual Weight | Actual Return | Benchmark Weight | Benchmark Return | |
| Stocks | 70% | 7.8% | 60% | 13.2% |
| Bonds | 30% | 5.3% | 40% | 7.5% |
What is the contribution of security selection to relative performance?
Make sure to use the negative sign if your answer is negative!
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