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The Manager of Cross Border Uses EAFE as a Benchmark

Question 29

Multiple Choice

The manager of Cross Border uses EAFE as a benchmark. Last year's performance for the fund and the benchmark were as follows:  EAFE  Return on  Currency  Cross  Manager’s  Weight  Equity  Aplication  Border’s  Return  Index E1/E01 Weight  Eur 0.3010%10%0.259% Aus 0.105%10%0.258% FE 0.6015%30%0.5016%\begin{array}{ccccc}&\text { EAFE } & \text { Return on } & \text { Currency } & \text { Cross } & \text { Manager's } \\&\text { Weight } & \text { Equity } & \text { Aplication } & \text { Border's } & \text { Return } \\&& \text { Index } & E_{1} / E_{0-1} & \text { Weight } &\\ \text { Eur } &0.30&10\%&10\%&0.25&9\%\\ \text { Aus } &0.10&5\%&-10\%&0.25&8\%\\ \text { FE } &0.60&15\%&30\%&0.50&16\%\\\end{array}
Calculate Cross Border's country selection return contribution.


A) 12.5%
B) -12.5%
C) 11.25%
D) -1.25%
E) 1.25%

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