Question: In a particular year, Wiseguys Mutual Fund earned a return of 15% by making the following investments in the following asset classes Asset Class Weight

In a particular year, Wiseguys Mutual Fund earned a return of 15% by making the following investments in the following asset classes

Asset Class

Weight

Return

Bonds

Stocks

10%

90%

6%

16%

The return on a benchmark portfolio was 11%, calculated as follows:

Asset Class

Weight

Return

Bonds (Lehman Index)

Stocks (S&P 500 index)

40%

60%

5%

15%

The contribution of asset allocation across markets to the total excess return was

A.

5%

B.

4%

C.

3%

D.

1%

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