Question: Consider the following performance data for a portfolio manager: Benchmark Portfolio Index Portfolio Weight Weight Weight Return Return Stocks 0.65 0.70 0.11 0.12 Bonds 0.30

Consider the following performance data for a portfolio manager:

Benchmark Portfolio Index Portfolio

Weight

Weight Weight Return Return
Stocks 0.65 0.70 0.11 0.12
Bonds 0.30 0.25 0.07 0.08
cash 0.05 0.05 0.03 0.025

2 (a) 10 points Calculate the percentage return that can be attributed to the asset allocation decision.

2 (b) 10 points Calculate the percentage return that can be attributed to the security selection decision.

Explain how you got there

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