Looking at the prometric link which CFA sent us, I just realized I can´t solve one single question under Question 5.
5.1 Demonstrate whether the total fund outperformed a pure indexing strategy.
I know the brinson and BF formulas for allocation and selection, but just realized I am totally unable to apply them. Can please someone explain how to approach these kind of questions and how would you solve it?
5.2 Determine how much of the fund’s return was due to style bias.
?? Return due to style would be for me Return of benchmark - return of index, but no idea how to solve it here??
5.3 Determine how much of the fund’s return was due to active management.
Again no idea??? A bit panicking already…
And finally 5.4, GIPS calculation
Calculate the time-weighted rate of return for Manager A for the month of April.
I would solve it accordingly:
51 would be the portfolio value before CF ie:
1.(51 - 52/52) = r1
2. (57,5 - 56)/56 = r2
3. (55-54)/54 = r3
and then (1+r1)(1+r2)(1+r3) -1 = final r for April
Is it a correct approach??
Many thanks guys upfront who ever can help me with this!!!
