In a particular year, a fund manager made the following investments in the following asset classes Weight 40% 60% Bonds Stocks Return 5% 18% The return on a benchmark portfolio was calculated as follows: Weight Return 70% 3% 30% 12% Bonds (Bond Index) Stocks (Stock Index) Calculate the contribution of security selection (in percentage terms) to the fund's total excess return.
In a particular year, a fund manager made the following investments in the following asset classes Weight 40% 60% Bonds Stocks Return 5% 18% The return on a benchmark portfolio was calculated as follows: Weight Return 70% 3% 30% 12% Bonds (Bond Index) Stocks (Stock Index) Calculate the contribution of security selection (in percentage terms) to the fund's total excess return.
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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Question
66.
Subject
Finance
Transcribed Image Text:In a particular year, a fund manager made the following investments in the following asset classes:
Weight
40%
60%
Bonds
Stocks
Return
5%
18%
The return on a benchmark portfolio was calculated as follows:
Weight
70%
30%
Bonds (Bond Index)
Stocks (Stock Index)
Return
3%
12%
Calculate the contribution of security selection (in percentage terms) to the fund's total excess
return.
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