I see this question asked but I can’t find answer in search. Not many responses. Question 12 is asking for selection effect but the answer solves for “selection + interaction”.
I’ve spent hours on this and have got nowhere. Hope somebody can help.
Hey S2000 — you left an amazing response last time for my first post. Should I just leave this question?
I’ve went through all of the online forums and even reddit but I don’t have an account on it. But I read them. Nobody seems to have an answer.
If people or anybody has feedback, please message. I do understand the difference between BHB and BF now but this still makes no sense.
For whatever reason, custom is to attribute the interaction effect to security selection rather than to (sector) allocation. Obviously, it encompasses both. Such is reality, for better or for worse.
(I know: that’s a completely unsatisfying answer. That’s the way things go.)
That is good enough for me. It was more about stoping my head from pain. I’m too old for this now. As an example of how old that comment of being old reminded me of Lethal Weapon (the first one).