In a Particular Year, Razorback Mutual Fund Earned a Return

question 73

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 asset allocation across 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:

Price-Earnings Ratio

A valuation metric for stocks, calculated by dividing the market price of a stock by its earnings per share, indicating the dollar amount an investor can expect to invest in a company to receive one dollar of that company’s earnings.

Common Stock

Equity ownership in a corporation, with shareholders entitled to vote on corporate matters and receive dividends when declared.

Market Price

The present cost at which a product or service can be purchased or sold on the market.

Return on Total Assets

A measure of profitability that indicates how efficiently a company is using its assets to generate earnings.