Consider the data disclosed in Table 4 with respect to the performance of an US active...

 

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Consider the data disclosed in Table 4 with respect to the performance of an US active asset manager (AM) internationally diversified. Europe Asia- Pacific Africa Benchmark Weight 0.40 0.25 0.35 Return on Equity Index 12% 8% 18% Table 4 Currency Appreciation vs US Dollar -3% 4% -6% AM AM Weight Return 0.35 14% 0.25 0.40 6% 16% a) Compute the total performance of the Asset Manager and the Benchmark. How did the Asset Manager perform compared to the Benchmark? Give your answers with one decimal place (for example, 1.55% is rounded to 1.6%). Explain your answer. [10 marks] b) To better understand the relative performance of the Asset Manager, decompose total performance into currency selection, country selection and stock selection, and discuss. Give your answers with one decimal place (e.g., 1.55% is rounded to 1.6%). [10 marks] c) Consider the breakdown obtained in Question 3b. How do you explain the relative performance of the Asset Manager versus the International Benchmark? [10 marks] Consider the data disclosed in Table 4 with respect to the performance of an US active asset manager (AM) internationally diversified. Europe Asia- Pacific Africa Benchmark Weight 0.40 0.25 0.35 Return on Equity Index 12% 8% 18% Table 4 Currency Appreciation vs US Dollar -3% 4% -6% AM AM Weight Return 0.35 14% 0.25 0.40 6% 16% a) Compute the total performance of the Asset Manager and the Benchmark. How did the Asset Manager perform compared to the Benchmark? Give your answers with one decimal place (for example, 1.55% is rounded to 1.6%). Explain your answer. [10 marks] b) To better understand the relative performance of the Asset Manager, decompose total performance into currency selection, country selection and stock selection, and discuss. Give your answers with one decimal place (e.g., 1.55% is rounded to 1.6%). [10 marks] c) Consider the breakdown obtained in Question 3b. How do you explain the relative performance of the Asset Manager versus the International Benchmark? [10 marks]

Answer rating: 100% (QA)

a To compute the total performance of the Asset Manager and the Benchmark we need to calculate the weighted average returns for each region based on t... View the full answer