In a Particular Year, Aggie Mutual Fund Earned a Return

question 7

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 contribution of asset allocation across markets to the total excess return was

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

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Definitions:

Units Produced

The total quantity of goods or products that a company manufactures during a specific period.

Ending Inventory

The worth of products ready for purchase at an accounting period's close, determined by adding the initial inventory to acquisitions and subtracting the cost of goods sold.

Unit Sales

The quantity of items sold by a company, not taking into account any returns or cancellations.

Units

A measure of quantity or amount in business, such as items produced, sold, or in inventory.