Shown below are the investment weights for the securities held in four different portfolios: three mutual funds

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Shown below are the investment weights for the securities held in four different portfolios: three mutual funds and the benchmark index that each of those funds uses. 

% Security Investment Weight: Security Benchmark Index Fund X Fund Y Fund Z 1 10% 12% 40% 11% 2 10 13 9. 3 10 8 4 10 15 10 7 11 10 10 11 7 10 30 9 8 10 14 11 10 6. 11 10 10 10 25 9.


a. Calculate the active share (AS) measure for Fund X, Fund Y, and Fund Z relative to the benchmark index. 

b. Using these active share calculations, indicate which fund is the most likely to be considered: (i) a passive index fund, (ii) a closet (or enhanced) index fund, and (iii) an actively managed concentrated stock-picking fund. Explain the reason for your classification.

Mutual Funds
Mutual funds are like a pool of funds gathered by different small investors that have simalar investment perspective about returns on their investments. These funds are managed by professional investment managers who act smartly on behalf of the...
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Related Book For  answer-question

Investment Analysis and Portfolio Management

ISBN: 978-1305262997

11th Edition

Authors: Frank K. Reilly, Keith C. Brown, Sanford J. Leeds

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