In a Particular Year, Razorback Mutual Fund Earned a Return

question 22

Multiple Choice

In a particular year, Razorback Mutual Fund earned a return of 1% by making the following investments in asset classes: The return on a bogey portfolio was 2%, calculated from the following information.
The contribution of selection within markets to the Razorback Fund's total excess return was

• A)-1.80%.
• B)-1.00%.
• C)0.80%.
• D)1.00%.

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Definitions:

Cost-Benefit Analysis

An economic evaluation method that compares the costs and benefits of a project or decision to determine its feasibility or compare alternatives.

Free-Rider Problem

A situation in economics where individuals consume more than their fair share of a public resource, or shoulder less of the cost of its provision, leading to underproduction or depletion of the resource.

Aristotle

An ancient Greek philosopher and scientist, one of the greatest intellectual figures of Western history.

Free Riders

Free riders are individuals who benefit from resources, goods, or services without paying for the cost of the benefit, often leading to inefficiencies in markets or public services.