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 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%.

Question

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 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%.

Quizplus · Accepted Answer

To calculate the contribution of asset allocation across markets to the excess return, we need to subtract the actual return of the Razorback Fund (1%) from the return of the bogey portfolio (2%). This gives us a difference of -1%. Therefore, the contribution of asset allocation across markets to the Razorback Fund's total excess return was -1% or -1.00%. Answer A is the closest choice.

In a Particular Year, Razorback Mutual Fund Earned a Return