From past paper:
Decision making level Incremental return (%)
Risk-free asset 0.5
Asset category 7.52
Benchmarks 0.14
Investment managers 0.08
Allocation effects -0.1
Total fund 8.14 Calculate style bias and active management: 1. Style bias Style bias = benchmark – market index. Answer is 0.14%. Why do we not subtract a market index value? 2. Active Management Active management = portfolio – benchmark Answer is 0.08% Why is the answer not = 8.14% – 0.14% = 8%