Economics - BB5 - Page 185

CFA Level III Economics
#1

They have equation listed on page 184 but don’t understand fully how relate to BB5.

They say 12.18% in BB5 is return and made up of (3.14 + 4.12 + 0 + .95 + 3.97)

Where is this (equation) coming from? It’s not the equation on page 184. It kind of looks like the Grinold equation from last year but the text hasn’t taught this up to this point yet. Can explain somebody?

I can’t complete part 2 of BB5 either because it’s related to this.

Thanks somebody.

#2

Yes: it looks like Grinold-Kroner.

Pretend that you already knew G-K and carry on.

#3

Thanks S2000.

#4

My pleasure.