Calculate the contribution to total performance from currency, country, and stock selection for the manager in the example below. All exchange rates are expressed as units of foreign currency that can be purchased with one U.S. dollar.
|
EAFE Weight |
Return on |
|
Manager’s Weight |
Manager’s Return |
||
|
Equity Index |
E1 /E0 |
|||||
|
Europe |
0.30 |
20% |
0.9 |
0.35 |
18% |
|
|
Australia |
0.10 |
15 |
1.0 |
0.15 |
20 |
|
|
Far East |
0.60 |
25 |
1.1 |
0.50 |
20 |
|