I thought the answer is C instead of D. Portfolio manager uses the same country weight as the benchmark, so Market allocation effect is zero, currency effect may be nonzero. Please see P67, Which countries or sectors? (Currency allocation) How much to each country or sector? (Market allocation) Which specific securities in each sector? (Security selection) Any thoughts?
Did you check Schweser errata?
Thank you, tanyusha. I checked the errata, I am correct. If without currency hedging, currency effect will be zero too.