In a Particular Year, Razorback Mutual Fund Earned a Return

question 9

Multiple Choice

In a particular year, Razorback Mutual Fund earned a return of 1% by making the following investments in asset classes: $$\begin{array} { | l | l | l | } \hline & \text { Weight } & \text { Return } \\\hline \text { Bonds } & 20 \% & 5 \% \\\hline \text { Stocks } & 80 \% & 0 \% \\\hline\end{array}$$ The return on a bogey portfolio was 2%, calculated from the following information. $$\begin{array} { | l | l | l | } \hline & \text { Weight } & \text { Return } \\\hline \text { Bonds (Lehman Brothers Index) } & 50 \% & 5 \% \\\hline \text { Stocks (S\&P 500 Index) } & 50 \% & - 1 \% \\\hline\end{array}$$
-The total excess return on the Razorback Fund's managed portfolio was __________.

• A)-1.80%
• B)-1.00%
• C)0.80%
• D)1.00%
• E)none of the above

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Definitions:

Cardiovascular Disease

A group of disorders affecting the heart or the blood vessels, which encompasses conditions like coronary artery disease, hypertension, and stroke.

Set-Points

The theory that each person's body has a predetermined or natural weight that it seeks to maintain through various physiological mechanisms.

Genetics

The study of heredity and the variation of inherited characteristics.

Ethnicity

Shared cultural practices, perspectives, and distinctions that set apart one group of people from another, based on heritage, language, religion, and social experiences.