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In a particular year Salmon Arm Mutual Fund earned the following returns by making the following investments in 2 asset classes Weight Return Bonds 20% Stocks 80% 17% 12% The portfolio manager used

In a particular year, Salmon Arm Mutual Fund earned the following returns by making the following investments in 2 asset classes: Weight Return Bonds 20% Stocks 80% 17% 12% The portfolio manager used a benchmark portfolio (bogey) based on the following that obtained the following returns: Weight Return Bonds (aggregate bond index) 60% 10% Stocks (S&P 500 Index) 40% 15% a. What was the total returns of the Salmon Arm Mutual Fund and of the bogey portfolio b. What was the total alpha generated by the portfolio manager? c. What was the contribution of asset allocation decision on the total alpha? d. What was the contribution of the security selection? Show formulas, calculations and results with 2 decimals. (4 points)

 

May 18 2020 View more View Less

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