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(Solved): Calculate the contribution to total performance from currency, country, and stock selection for the ...



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 1 U.S. dollar. (Do not round intermediate calculations. Round your answers to 2 decimal places. Input all amounts as positive values.)

\begin{tabular}{lccccc} 
& \multicolumn{3}{c}{ Return on } & Managers & Managers \\
& EAFE Weight & Equity Index & \( E_{1}

\begin{tabular}{lccccc} & \multicolumn{3}{c}{ Return on } & Manager's & Manager's \\ & EAFE Weight & Equity Index & \( E_{1} / E_{0} \) & Weight & Return \\ Europe & \( 0.5 \) & 148 & \( 0.9 \) & \( 0.4 \) & 168 \\ Australasia & \( 0.1 \) & 18 & \( 0.6 \) & \( 0.22 \) & 19 \\ Far East & \( 0.4 \) & 19 & \( 1.4 \) & \( 0.38 \) & 19 \end{tabular} \begin{tabular}{|l||l|l||l|l|} \hline \multicolumn{2}{|c|}{} & \multicolumn{3}{c|}{ Profit/Loss } \\ \hline Currency Selection & \( \% \) & & relative to EAFE \\ \hline Country Selection & \( \% \) & & relative to EAFE \\ \hline Stock Selection & \( \% \) & & relative to EAFE \\ \hline \end{tabular}


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Currency Selection: EAFE = EAFE weight * (E1/E0 -1) EAFE = [0.5 * (0.9 -1)] + [0.1 * (0.6 -1)] + [0.4 * (1.4-1)] = 7.0% Manager's = Manager's weight *
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