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Problem 24-12 (Algo) A global equity manager is assigned to select stocks from a universe of large stocks throughout the world. The manager will be evaluated by comparing her returns to the return on the MSCI World Market Portfolio, but she is free to hold stocks from various countries in whatever proportions she finds desirable. Results for a given month are contained in the following table: Return of Stock Index for That Country U.K. Weight In MSCI Index 0.19 Manager's Weight 0.38 Manager's Return in Country 20% Japan 0.32 U.S. Germany 0.41 0.08 0.3 0.32 14% 10% 5% Required: Country 12% 14% 14% 12% a. Calculate the total value added of all the manager's decisions this period. Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Negative amount should be indicated by a minus sign. b. Calculate the value added (or subtracted) by her country allocation decisions. Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Negative amount should be indicated by a minus sign. c. Calculate the value added from her stock selection ability within countries. Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Negative amount should be indicated by a minus sign. a. Added value b. Contribution of country allocation c. Contribution of stock selection % % %

Problem 24-12 (Algo) A global equity manager is assigned to select stocks from a universe of large stocks throughout the world. The manager will be evaluated by comparing her returns to the return on the MSCI World Market Portfolio, but she is free to hold stocks from various countries in whatever proportions she finds desirable. Results for a given month are contained in the following table: Return of Stock Index for That Country U.K. Weight In MSCI Index 0.19 Manager's Weight 0.38 Manager's Return in Country 20% Japan 0.32 U.S. Germany 0.41 0.08 0.3 0.32 14% 10% 5% Required: Country 12% 14% 14% 12% a. Calculate the total value added of all the manager's decisions this period. Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Negative amount should be indicated by a minus sign. b. Calculate the value added (or subtracted) by her country allocation decisions. Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Negative amount should be indicated by a minus sign. c. Calculate the value added from her stock selection ability within countries. Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Negative amount should be indicated by a minus sign. a. Added value b. Contribution of country allocation c. Contribution of stock selection % % %

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)
Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)
8th Edition
ISBN:9781285065137
Author:Eugene F. Brigham, Joel F. Houston
Publisher:Eugene F. Brigham, Joel F. Houston
Chapter8: Risk And Rates Of Return
Section: Chapter Questions
Problem 4DQ: Select one of the four stocks listed in Question 3 by entering the companys ticker symbol on the...
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Problem 24-12 (Algo) A global equity manager is assigned to select stocks from a universe of large stocks throughout the world. The manager will be evaluated by comparing her returns to the return on the MSCI World Market Portfolio, but she is free to hold stocks from various countries in whatever proportions she finds desirable. Results for a given month are contained in the following table: Return of Stock Index for That Country U.K. Weight In MSCI Index Manager's Weight Manager's Return in Country 0.19 0.38 20% Japan 0.32 0.3 14% U.S. Germany 0.41 0.08 0.32 0 10% 5% Required: Country 12% 14% 14% 12% a. Calculate the total value added of all the manager's decisions this period. Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Negative amount should be indicated by a minus sign. b. Calculate the value added (or subtracted) by her country allocation decisions. Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Negative amount should be indicated by a minus sign. c. Calculate the value added from her stock selection ability within countries. Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Negative amount should be indicated by a minus sign. a. Added value b. Contribution of country allocation c. Contribution of stock selection % % %
Transcribed Image Text:Problem 24-12 (Algo) A global equity manager is assigned to select stocks from a universe of large stocks throughout the world. The manager will be evaluated by comparing her returns to the return on the MSCI World Market Portfolio, but she is free to hold stocks from various countries in whatever proportions she finds desirable. Results for a given month are contained in the following table: Return of Stock Index for That Country U.K. Weight In MSCI Index Manager's Weight Manager's Return in Country 0.19 0.38 20% Japan 0.32 0.3 14% U.S. Germany 0.41 0.08 0.32 0 10% 5% Required: Country 12% 14% 14% 12% a. Calculate the total value added of all the manager's decisions this period. Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Negative amount should be indicated by a minus sign. b. Calculate the value added (or subtracted) by her country allocation decisions. Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Negative amount should be indicated by a minus sign. c. Calculate the value added from her stock selection ability within countries. Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Negative amount should be indicated by a minus sign. a. Added value b. Contribution of country allocation c. Contribution of stock selection % % %
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