As port of her analysis, Jones also takes a look at one of Primo’s global funds. In this particular portfolio, Primo is invested 75% in Dutch stocks and 25% in British stocks. The benchmark invested 50% in each—Dutch and British stocks. On average, the British stocks outperformed the Dutch stocks. The euro appreciated 6% versus the U.S. dollar over the holding period, while the pound depreciated 2% versus the dollar. In terms of the local return, Primo outperformed the benchmark with the Dutch investments but underperformed the index with respect to the British stocks.
a. Calculate the amount by which the Primo portfolio out- (or under-) performed the market over the period.(Input the value as positive value. Do not round intermediate calculations. Round your answer to 1 decimal place.)
Primo portfolio (Click to select)outperformed byunderperformed by %
b. Calculate the contribution to performance of the pure sector allocation. (Negative value should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to 1 decimal place.)
Pure sector allocation %
c. Calculate the contribution to performance of the security selection decisions. (Do not round intermediate calculations. Round your answer to 1 decimal place.)
Security selection decisions %