In a Particular Year, Razorback Mutual Fund Earned a Return

question 12

Multiple Choice

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

Pavlovian Conditioning

A learning process where an originally neutral stimulus becomes associated with a specific physiological or emotional response after being paired with a stimulus that naturally evokes that response.

Primary Drives

are innate biological needs (e.g., hunger, thirst, sleep) that motivate behavior essential for survival.

Hunger

A physiological state that motivates an organism to seek food for energy.

Thirst

The basic physiological sensation of needing to drink fluids, triggered by the body's need for water to maintain balance and function.