The manager of Quantitative International Fund uses EAFE as a benchmark.Last year's performance for the fund and the benchmark were as follows: Calculate Quantitative's country selection return contribution.
A)12.5%
B)-12.5%
C)11.25%
D)-1.25%
E)1.25%

Question

The manager of Quantitative International Fund uses EAFE as a benchmark.Last year's performance for the fund and the benchmark were as follows:  Calculate Quantitative's country selection return contribution.
A)12.5% 
B)-12.5% 
C)11.25% 
D)-1.25% 
E)1.25%

Quizplus · Accepted Answer

EAFE: (.30)(10%) + (.10)(5%) + (.60)(15%) = 12.5%; Diversified: (.25)(10%) + (.25)(5%) + (.50)(15%) = 11.25%; Loss of 1.25% relative to EAFE.

The Manager of Quantitative International Fund Uses EAFE as a Benchmark.Last