Consider the annual returns produced by two different active equity portfolio managers (A and B) as...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Consider the annual returns produced by two different active equity portfolio managers (A and B) as well as those to the stock index with which they are both compared: Period 1 2 3 4 5 6 7 8 9 10 % % % Manager A 12.1% -2.9 14.0 0.7 -7.0 23.7 -11.4 % 5.3 3.8 19.1 Manager B 12.8% -3.5 13.3 2.4 -6.5 25.8 -11.4 a. Did either manager outperform the index, based on the average annual return differential that he or she produced relative to the benchmark? Use a minus sign to enter negative values, if any. Do not round intermediate calculations. Round your answers to two decimal places. Manager A: Manager B: -Select- ✓ 's average return is less than the index and -Select- ✓'s average exceeded that of the index. b. Calculate the tracking error for each manager relative to the index. Which manager did a better job of limiting his or her client's unsystematic risk exposure? Do not round intermediate calculations. Round your answers to two decimal places. Manager A: Manager B: -Select- ✓ did the better job of limiting the client's exposure to unsystematic risk as the difference between manager's returns and those of the index has a -Select-standard deviation. -Select- larger smaller 5.2 3.8 18.8 Index 11.2% -2.1 18.6 -0.8 -3.3 21.0 -13.6 5.3 2.3 19.6 Consider the annual returns produced by two different active equity portfolio managers (A and B) as well as those to the stock index with which they are both compared: Period 1 2 3 4 5 6 7 8 9 10 % % % Manager A 12.1% -2.9 14.0 0.7 -7.0 23.7 -11.4 % 5.3 3.8 19.1 Manager B 12.8% -3.5 13.3 2.4 -6.5 25.8 -11.4 a. Did either manager outperform the index, based on the average annual return differential that he or she produced relative to the benchmark? Use a minus sign to enter negative values, if any. Do not round intermediate calculations. Round your answers to two decimal places. Manager A: Manager B: -Select- ✓ 's average return is less than the index and -Select- ✓'s average exceeded that of the index. b. Calculate the tracking error for each manager relative to the index. Which manager did a better job of limiting his or her client's unsystematic risk exposure? Do not round intermediate calculations. Round your answers to two decimal places. Manager A: Manager B: -Select- ✓ did the better job of limiting the client's exposure to unsystematic risk as the difference between manager's returns and those of the index has a -Select-standard deviation. -Select- larger smaller 5.2 3.8 18.8 Index 11.2% -2.1 18.6 -0.8 -3.3 21.0 -13.6 5.3 2.3 19.6
Expert Answer:
Answer rating: 100% (QA)
a To determine whether either manager outperformed the index we need to calculate the average annual return differential for each manager relative to ... View the full answer
Related Book For
The Legal Environment Today Summarized Case Edition
ISBN: 978-1305262768
8th Edition
Authors: Roger LeRoy Miller
Posted Date:
Students also viewed these finance questions
-
The minutes of the board of directors of the Meeting of March 5, 2011 The meeting of the board of directors of Tetonic Metals was called to order by the James Cook, chairman of the board, at 8:30 am....
-
Was the meeting of the Bigmar board of directors valid? Bigmar was a Delaware corporation that manufactured and marketed pharmaceuticals in Europe. While trying to raise additional capital, the...
-
Directors are expected to use their best business judgment in managing the corporation. What must directors do to avoid liability for honest mistakes of judgment and poor business decisions?
-
The following are the Ledger Balance (in thousands) extracted from the books of Vaishnavi Bank Ltd as on March 31, 2016. The bank's Profit and Loss Account for the year ended and Balance Sheet as at...
-
Did disclosure of confidential documents to a merger partner's investment banker waive the attorney-client privilege been waived or does the common interest rule preserve the privilege?
-
Treatment of 4-penten-l-ol with aqueous Br2 yields a cyclic bromo ether rather than the expected bromohydrin. Suggest a mechanism, using curved arrows to show electronmovement. CH2B Br2, H20 %3...
-
The John Gore Organization owns and operates the Charles Playhouse, a theater in Boston, Massachusetts. Evelyn Castillo has diabetes, a disability under the Americans with Disabilities Act (ADA)....
-
At the end of the fiscal year, Siglo Delivery Services trial balance appeared as follows. Required 1. Enter the trial balance amounts in the Trial Balance columns of a work sheet and complete the...
-
Solve the following complex number problems. Solutions for complex number transformation is required in this item. a. Simplify: 120 +31 18-2115 2111 +5 b. (32-120)+(1/120) (4-1)(-1-1) 5e C. 2e0.25mi...
-
Your boss recently told you that you needed to be more "culturally intelligent." Specifically he said, "I received some feedback from a major client, Palo, who said after a meeting him that you...
-
What does the functionalist perspective state regarding socialization?
-
Comparative Income statement and Comparative balance sheet of Manfield, Inc. for the year ended December 31, 2024 and 2023 are given Manfield, Inc. Comparative Income Statement Years Ended December...
-
A taxpayer presents you with the following information concerning her 2022 income tax return: Employment income $39,000, taxable dividend income of $2,100, net rental income of ($2,435.75), allowable...
-
It is nearly impossible to be unaware of the historic inflation that is currently impacting oureconomy. Knowing what you do about the money market, prices, and inflation, provide a minireport (about...
-
In 2021 25,000,000 in patient revenue. In 2030 revenue is expected to be 59,000,00. What is the compound growth rate in patient revenues over time? Confirming answers. thank you. Problem 6.34 King...
-
Temperance's net worth is $50,000. Her debt ratio is 0.5. Her long-term assets total $90,000, and monthly expenses are $5,000. What is her liquidity ratio?
-
Taking deliberate steps to build diverse and inclusive teams and to address systemic racism are core expectations in today's public service. Recall the most diverse team you have worked with. How did...
-
A horizontal annulus with inside and outside diameters of 8 and 10 cm, respectively, contains liquid water. The inside and outside surfaces are maintained at 40 and 20oC, respectively. Calculate the...
-
Under what circumstance might a judge rely on case law to determine the intent and purpose of a statute?
-
Why is the protection of trademarks important?
-
Under what circumstances will a covenant not to compete be enforced? When will such covenants not be enforced?
-
What about the economic benefits of producing accounting information? Do you think it is easier, or harder, to assess the economic benefits of accounting information than to assess the costs of...
-
Can you think of at least four types of organisation that are not primarily concerned with making profits?
-
On Wednesday, Paul bought more wrapping paper for 46 cash. However, it was raining hard for much of the day and sales were slow. After Paul had sold half of his total inventories for 32, he decided...
Study smarter with the SolutionInn App