In a particular year, Salmon Arm Mutual Fund earned a return of 16% by making the following investments in asset classes: The return on a bogey portfolio was 12% calculated as follows:
-The total excess return on the managed portfolio was __________.
A) 2%
B) 3%
C) 4%
D) 5%

Question

In a particular year, Salmon Arm Mutual Fund earned a return of 16% by making the following investments in asset classes:  The return on a bogey portfolio was 12% calculated as follows: 
-The total excess return on the managed portfolio was __________.
A) 2% 
B) 3% 
C) 4% 
D) 5%

Quizplus · Accepted Answer

Excess Return = Managed Portfolio Return - Bogey Portfolio Return
Excess Return = 16% - 12%
Excess Return = 4%

Therefore, the total excess return on the managed portfolio was 4%, which is option C.

In a Particular Year, Salmon Arm Mutual Fund Earned a Return