2011 CFA am Q9 (FI attribution)

The question says that manager’s strategy is “to add value by identifying undervalued securities and sectors to take advantage of bonds that are mispriced by the market”. Then we see that the manager had added 0.3% return from “Other management effects”.

How can you conclude that the manager’s statement is true? It seems to me that we cannot say if he added 0.3% by identifying undervalued securities as he says. He may have sold short overvalued securities or done e.g. call positioning. We would never know this by just looking at 0.3% added value.

mananger B added 0.32% by other mgmt effects, - that is adding value IMO

yea i see what youre saying. dont know what to say. quote should have sayd identifiying overvalued/undervalued securities and it would have been ok.

i didnt even catch that one. i had a similar issue with manager A’s statement. it is at the below link if u want to take a look.


but the quote doesnt say that. it says identifiying undervalued securities

other management effects includes

  • security selection

  • Sector Quality Effects

  • Transaction Costs

In the absence of any other information and without an appropriate split up - we only can assume that they have done well in security selection, given a positive value to the attribution.

But CP, how the hell were you supposed to knwo that Other Maangement efffects was Security

Ssector and security selection

Sometimes there questiosn are so obscure

By looking at the table in the book which describes it … I believe Exh. 15.