2. Consider the following information regarding the performance of a fund manager in a recent month. The table shows the

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2 Consider The Following Information Regarding The Performance Of A Fund Manager In A Recent Month The Table Shows The 1 (35.47 KiB) Viewed 41 times

2. Consider the following information regarding the performance of a fund manager in a recent month. The table shows the actual return of each asset class of the manager's portfolio in column 1, the fraction of the portfolio allocated to cach asset class in column 2, the benchmark or neutral asset class allocations in column 3, and the returns of asset class indices in column 4. (1) (2) (3) (4) Actual Return Actual Weight Benchmark Index Return Weight Equity 2% 70% 60% 2.5% (S&P 500) Bonds 1% 20% 30% 1.2% (Barclays Index) Cash 0.5% 10% 10% 0.5% 1) What was the fund manager's return in the month? What was the manager's over-performance or underperformance? 2) What was the fund manager's contribution of security selection to relative performance? 3) What was the fund manager's contribution of asset allocation to relative performance?