# Macro Again...the calcuation.

Given lack of example available in the books (CFAI and schweser), I made this up (totally made up number). I am not sure if this is a correct setup, please correct me if not. Thanks. Allocatio Actual Return Benchmark Return Domestic Equity 70% 6.50% 6.25% Mgr A Large-Cap 60% 5.20% 4.90% Mgr B Small-Cap 40% 7.50% 7.85% Domestic FI 30% 5.60% 5.25% Mgr E Government 45% 4.50% 4.25% Mgr F Corportate 55% 5.70% 5.80% Given rfr=3% What is the asset catergory contribution? What is the Benchmark contribution? What is the investment manager contribution? From my understanding, Asset catergory = (0.7)(6.5-3)+(0.3)(5.6-3) After that, I am lost…

Ok I’ll take a stab at it, totally guessing here. Assuming Starting value was 100. Stalla doesnt really explain it too well. I'll have to check out the readings on this one, but this is my guess: Return BMV Rf 3.00% +3 ACC 2.79% +2.79 (5.79% - 3% = 2.79%) BC 0.16% +0.16 (5.95% - 2.79% - 3% = 0.16%) IM 0.28% +0.28 (6.23 – 0.16 - 2.79 – 3 = 0.28) Total 6.23% %6.23

WS any guidance???

Big, thanks for taking a stab at this…seriouly, I read the material 5 times now (regarding this), all they give was formular, I am have a hard time connecting the dot. My guess is asset category = (0.7)(6.5-3)+(0.3)(5.6-3) Benchmark = (0.7*0.6)(5.2-6.5)+(07*0.4)(7.5-6.5)+(0.3*0.45)(4.5-5.6)+(0.3*0.55)(5.7-5.6) Investment manager = (0.7*0.6)(5.2-4.9)+(0.7*0.4)(7.5-7.85)+(0.3*0.45)(4.5-4.25)+(0.3*0.55)(5.7-5.8) …both book (CFAI and schweser) didn’t have any sampel at all.

ws you are correct

Are you sure??? I am so not sure about my guess.

pretty sure

CSK how do you know

Asset category and investment manger part makes sense…however, the benchmark part, if I understand correctly, is that talking about misfit return???

bigwilly Wrote: ------------------------------------------------------- > CSK how do you know i know how to calculate it. I am good at maths and interents

I think the Asset Allocation should be based off Benchmark Returns. Not the Fund’s return…

If you know who to calculate it then do it.

^how many different kind of mathS and internetS do you know??

I need to look at CFAI text for this as Stalla is crap for this.

CSK…I am looking at CFAI material Volum 6, page 40, the sentence under the forumlar, it says “Rbij is the return for the jth manager’s benchmark in the asset category i,” If that is the case, shouldn’t I be using the difference between the benchmark return and actual return? Thanks

ok this is how it works asset alloc = sum(wa*(ra-Rf)) bench alloc = sum(wa*wb(rb-ra)) manager alloc = sum(wa*wb(rp-rb) plug and chug. Now that i look at it i think benchmark is incorrect

^thought so…my original benchmark calcuation was wrong…thanks!!

err i mean Investment manager (0.7*0.6)(5.2-4.9) should be (0.7*0.6)(4.9-5.2) ect

CSK where did you get those formulas from?

waaaaaaaait wtf is actual and benchmark return for Domestic Equity 70% 6.50% 6.25% you should use only actual return for domestic equity not benchmark…