In a Particular Year, Aggie Mutual Fund Earned a Return

question 60

Multiple Choice

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

• A) 1%.
• B) 3%.
• C) 4%.
• D) 5%.

---

Definitions:

Inarticulate

Lacking the ability to express oneself clearly or effectively in speech or writing.

Epiphyseal Plate

Site at which bone growth in length occurs; located between the epiphysis and diaphysis of a long bone; area of hyaline cartilage where cartilage growth is followed by endochondral ossification; also called metaphysis or growth plate.

Synchondrosis

Synchondrosis is a type of joint where bones are joined by hyaline cartilage, allowing for growth or movement, as seen in the growth plates of children.

Syndesmosis

A type of fibrous joint at which two bones are bound by long collagen fibers, providing a flexible connection between them.