USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

-Refer to Exhibit 18.11. Which of the following statements is TRUE?

A) Sector/security selection hurt the portfolio performance; returns were 1.4% less than if the manager invested the funds in stocks and bond indexes.
B) Sector/security selection improved the port-folio performance by 1.4%; each sector return was higher than for index value.
C) Sector/security selection hurt the portfolio performance; returns were 6.8% less than if the manager invested the funds in stocks and bond indexes.
D) Sector/security selection improved the port-folio performance by 6.8%; each sector return was higher than for index return.
E) None of these are correct.

Correct Answer:

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