Question 1 (2 points)

The table presents the actual return of each sector of the manager's portfolio in column (1), the fraction of the portfolio allocated to each sector in column (2), the benchmark or neutral sector allocations in column (3), and the returns of sector indexes in column 4.

	Actual Return	Actual Weight	Benchmark Weight	Index Return
Bonds	12%	40%	60%	10%
Equity	20%	60%	40%	15%

What is the contribution of security selection to relative performance?

Question 1 options:

	3.5%
	3.8%
	4.4%
	4.1%

Question 2 (1 point)

The risk-free rate, average returns, standard deviations, and betas for three funds and the S&P 500 are given below.

Fund	Avg	Std Dev	Beta
A	12%	25%	1.1
B	15%	30%	1.3
C	10%	20%	0.9
S&P 500	11%	20%	1.0
rf	4%

What is the Jensens alpha for Fund C?

Question 2 options:

	0.3%
	-0.3%
	-1.9%
	1.9%