In a particular year, Lost Hope Mutual Fund made the following investments in asset classes:
Weight Return
Bonds 70.00% 9.25%
Stocks 30.00% 5.50%
The return on a bogey portfolio was 7.00%, calculated as follows:
Weight Return
Bonds (Shearson-Lehman Index) 40.00% 10.00%
Stocks (S&P 500 Index) 60.00% 5.00%
Use the above information to answer the following three questions.
What was the total extra return on the Lost Hope Mutual Fund? Please calculate the total extra return as a percentage rather than a decimal, rounded to two decimal places.
What was the contribution of asset allocation across markets to the total extra return of the Lost Hope Mutual Fund? Please calculate the contribution of asset allocation as a percentage rather than a decimal, rounded to two decimal places.
What was the contribution of security selection within asset classes to the total extra return of the Lost Hope Mutual Fund? Please calculate the contribution of security selection as a percentage rather than a decimal, rounded to two decimal places.