Hi All,
In CFA Curriculum Volume 6 2020, on page 181 about calculation the attribution impact on performance attribution as below:
"To calculate allocation, we first calculate the contribution to allocation (Ai) for each sector. The contribution to allocation in the _i_th sector is equal to the portfolio’s sector weight minus the benchmark’s sector weight, times the benchmark sector return:
Equation (3)
Ai = (wi – Wi)Bi "
However, when I reach page 197, also for the allocation, the formula is Ai = (wi – Wi)(Bi - Benchmark return)
I’m very confused and do not know which is the correct formula. Would you guys please help emplain on this.