# Micro contribution formula and more

Anybody has trouble memorizing the formula from Performance Review Section, i.e., market allocation attribution, security selection attribution, currency attribution for the global investment management part; and also the formula for the micro contribution – pure sector attritution; selection/sector interactive attribution and within sector attribution. CANNOT REMEMBER THEM!!! So confused!!!

You don’t want to remember them, but instead try to understand them. Micro-attribution really boils down to 3 things: 1. Enhanced return due to overweight / underweight index 2. Enhanced return due to the security selection 3. The interaction b/w 1 and 2.

sunnycfa1 Wrote: ------------------------------------------------------- > Anybody has trouble memorizing the formula from > Performance Review Section, i.e., market > allocation attribution, security selection > attribution, currency attribution for the global > investment management part; and also the formula > for the micro contribution – pure sector > attritution; selection/sector interactive > attribution and within sector attribution. > CANNOT REMEMBER THEM!!! > So confused!!! the only way I think thta I get it is by practicing CFAI end chapter problem, practice them and practice them again dude. The is no way i can recall that thing without the end chapter practice. Trust me, I had the same problem but practice make it perfect, at least for now.

Thanks for your input, what about the global portfolio returns formula, 5 items in them, what about the benchmark tracking error? Are we supposed to remember that monster formula as well? So many formula to remember, and plus are we supposed to write them down first for the essay questions and then plug in the numbers? But I CANNOT write down the denotation correctly~~~ and the Max profit for all the option strategies? Any thoughts?

For the global portfolio; to find the different part, I plug the cuurency allocation because it seems the best way to do it for me. 1) Market alocation is easy to remember ( Portfolio weight - world index wieght)*Index return in the local currency 2)Security selection ( Return on local -Market index)*weight on each market 3)You should know the total return of your portfolio ( dollar, assuming you are a U.S investor). Finally , you plug for the currency allocation: Market + currency+security= total portfolio return. Solve for currency using simple agebra eqution. Someone may have a better way, which I love to know, but for now i will stick with that one until then.

Thanks, guys~

This is one of the most boring study sessions.