In a Particular Year, Aggie Mutual Fund Earned a Return

question 73

Multiple Choice

In a particular year, Aggie Mutual Fund earned a return of 15% by making the following investments in the following asset classes: $$\begin{array} { | l | l | l | } \hline & \text { Weight } & \text { Return } \\\hline \text { Bonds } & 10 \% & 6 \% \\\hline \text { Stocks } & 90 \% & 16 \% \\\hline\end{array}$$ The return on a bogey portfolio was 10%, calculated as follows: $$\begin{array} { | l | l | l | } \hline & \text { Weight } & \text { Return } \\\hline \text { Bonds (Lehman Brothers Index) } & 50 \% & 5 \% \\\hline \text { Stocks (S\&P 500 Index) } & 50 \% & 15 \% \\\hline\end{array}$$
-The total excess return on the Aggie managed portfolio was __________.

• A)1%
• B)3%
• C)4%
• D)5%
• E)none of the above

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Definitions:

Inertia

Inertia is the resistance to change in state of motion or rest, applying to physical objects as well as to organizations and individuals' reluctance to change their behaviors or beliefs.

Breakup Of A Work Group

The dissolution or disbanding of a team or group within an organization, often due to operational changes, conflicts, or reorganization.

Technophobia

The fear or aversion to new technology, often stemming from a lack of understanding or fear of change.

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An era of geologic time from about 252 to 66 million years ago, known as the age of reptiles, including dinosaurs.