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Question
59) In a particular year, Razorback Mutual Fund earned a return of 1% by making the following investments in asset classes:
| Weight | Return | |||
| Bonds | 20 | % | 5 | % |
| Stocks | 80 | % | 0 | % |
The return on a bogey portfolio was 2%, calculated from the following information.
| Weight | Return | |||||
| Bonds (Lehman Brothers Index) | 50 | % | 5 | % | ||
| Stocks (S&P 500 Index) | 50 | % | -1 | % | ||
The contribution of asset allocation across markets to the Razorback Fund's total excess return was
A) -1.80%.
B) -1.00%.
C) 0.80%.
D) 1.00%.
E) 1.80%
Answer
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