In a Particular Year, Aggie Mutual Fund Earned a Return

question 43

Multiple Choice

In a particular year, Aggie Mutual Fund earned a return of 15% by making the following investments in the following asset classes: The return on a bogey portfolio was 10%, calculated as follows:
The contribution of asset allocation across markets to the total excess return was

• A)1%.
• B)3%.
• C)4%.
• D)5%.

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Definitions:

Break-Even Point

The point at which total costs and total revenues are equal, resulting in no gain or loss for the business.

Fixed Costs

Overhead expenses that do not vary with production level or sales volume, such as rent, salaries, and insurance.

Variable Costs

Costs that change in proportion to the level of goods or services that a business produces.

Fixed Costs

Expenses that do not change in total regardless of the level of production or business activity.