Investments, 11th Edition (exclude Access Card)
Investments, 11th Edition (exclude Access Card)
11th Edition
ISBN: 9781260201543
Author: Zvi Bodie Professor; Alex Kane; Alan J. Marcus Professor
Publisher: McGraw-Hill Education
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Chapter 24, Problem 12PS

A

Summary Introduction

To calculate: Sum of all the value added of all managers.

Introduction: Portfolio is a group of assets that are invested in stock market and managed by the investors. Expected return of portfolio is the sum of all the expected profit percentage respective of the portfolio weight.

B

Summary Introduction

To calculate: Value added by country allocation.

Introduction: Country allocation is depending upon the excess weight. Excess weight is depending upon the manager’s index and MSCI index value.

C

Summary Introduction

To calculate: Value from the stock selection ability for all countries.

Introduction: Stock selection ability is depending upon the country allocation. This value is calculated by the excess return and excess return is difference of manager’s return and benchmark return.

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3 years ago, you invested $9,200. In 3 years, you expect to have $14,167. If you expect to earn the same annual return after 3 years from today as the annual return implied from the past and expected values given in the problem, then in how many years from today do you expect to have $28,798?
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