Question: For the sake of discussion, Jones put together some comparative two-year performance numbers that relate to Primos current domestic funds under management and a potential
For the sake of discussion, Jones put together some comparative two-year performance numbers that relate to Primos current domestic funds under management and a potential benchmark.
| Style Category | Weight | Return | ||
|---|---|---|---|---|
| Primo | Benchmark | Primo | Benchmark | |
| Large-cap growth | 0.60 | 0.50 | 17% | 16% |
| Mid-cap growth | 0.15 | 0.40 | 24 | 26 |
| Small-cap growth | 0.25 | 0.10 | 20 | 18 |
As part of her analysis, Jones also takes a look at one of Primos global funds. In this particular portfolio, Primo is invested 75% in Dutch stocks and 25% in British stocks. The benchmark is invested 50% in Dutch and 50% in British stocks. On average, the British stocks outperformed the Dutch stocks. The euro appreciated 6% versus the U.S. dollar over the holding period while the pound depreciated 2% versus the dollar. In terms of the local return, Primo outperformed the benchmark with the Dutch investments but underperformed the index with respect to the British stocks.
a. What is the within-sector selection effect for each individual sector? (Round your answers to 1 decimal place. Negative amount should be indicated by a minus sign.)
Large-cap growth ___%
Mid-cap growth ___%
Small-cap growth ___%
Total within-sector selection ___%
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