Question: Consider the statements below. I) Consider two US equity managers that are 100% invested in US stocks. If Manager A beats Manager B in terms

Consider the statements below.

I) Consider two US equity managers that are 100% invested in US stocks. If Manager A beats Manager B in terms of her stock SELECTION within each sector of the US equity market, it is impossible for Manager B to still deliver higher overall returns than Manager A.

II) The formulaReturn in Quarter Q1 = SUMPRODUCT(sector weight beginning Quarter Q1, return in each sector in Quarter 1)does not produce a meaningul result if the manager chose to reallocate weights across sectors midway through Quarter 1 (e.g., selling Financial stocks to buy Energy stocks).

		I and II are TRUE.
		I is TRUE, II is FALSE.
		I is FALSE, II is TRUE.
		I and II are FALSE.

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