In a Particular Year, Razorback Mutual Fund Earned a Return

question 22

Multiple Choice

In a particular year, Razorback Mutual Fund earned a return of 1% by making the following investments in asset classes:

The return on a bogey portfolio was 2%, calculated from the following information.

The contribution of selection within markets to the Razorback Fund's total excess return was

• A) -1.80%.
• B) -1.00%.
• C) 0.80%.
• D) 1.00%.
• E) 1.80%.

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Definitions:

Wealth-effect

The phenomenon where consumers spend more as the value of their assets, such as property or stocks, increases.

Real Wealth

The value of an individual's or entity's assets and resources, adjusted for inflation, reflecting the actual purchasing power over goods and services.

Aggregate Demand

The total demand for all goods and services within an economy at given price levels and in a given time period.

Short Run

A period during which at least one of a firm's inputs is fixed, only allowing the firm to vary some inputs while others remain unchanged.