Active Return following, question, active, return, asking

cfa10yrplan

So if you see a question asking you to calculate "active return" and you see the following items, what would be your answer?

Return of portfolio = 10%
Benchmark = 12%
Investor's Normal Benchmark (same style) = 9%

nannan66

forget it never no mind i know what u mean and i know what i mean .......its fine sorry for distracting

Unforseen

pimpineasy Wrote:
-------------------------------------------------------
> hmmmmm refer to cfai vol4 page 259 to see what i
> mean

Managers "true" active return = Manager's return - Manger's normal benchmark. 10 - 9 = 1
Manager's misfit active return = Manager's normal benchmark - Investors benchmark. = 9 - 12 = -3.

Total active return = 1 - 3 or -2.

I don't get it, isn't that what I had?

Roflnadal

pimpineasy Wrote:
-------------------------------------------------------
> Paraguay Wrote:
> --------------------------------------------------
> -----
> > Soccertom9 Wrote:
> >
> --------------------------------------------------
>
> > -----
> > > Return of portfolio = 10%
> > > Broad market Benchmark = 12%
> > > Manager's Normal Portfolio return = 9%
> > >
> > >
> > > Sorry thats just the way I remember it in my
> > head
> > > (how I wrote it before)
> >
> > True Active +1 .............. dont you mean
> total?
> > Active -2 /...............dont u mean
> true?
> > Misfit -3
>
>
> from memory

Managers style underperformed 3% to the broad index.
Manager outperformed style by 1%.
-3 + 1 = -2.

That is just how I remember it from doing it every day.

NakedPuts00

Soccertom9 Wrote:
-------------------------------------------------------
> omg I think I might be the one person who writes
> questions poorer than the BSAS.....
>
> True active return = manager's total return -
> manager's normal portfolio return
> Misfit active return = manager's normal portfolio
> return - investor's benchmark
>
> I wanted to know what the "active return" was....
> aka manager's total return - investor's
> benchmark


Wrong on the definition of misfit:

Misfit active return = manager's normal BENCHMARK return - investor's benchmark.

skycfa

Paraguay Wrote:
-------------------------------------------------------
> Soccertom9 Wrote:
> --------------------------------------------------
> -----
> > Return of portfolio = 10%
> > Broad market Benchmark = 12%
> > Manager's Normal Portfolio return = 9%
> >
> >
> > Sorry thats just the way I remember it in my
> head
> > (how I wrote it before)
>
> True Active +1 .............. dont you mean total?
> Active -2 /...............dont u mean true?
> Misfit -3


from memory

lcw77

omg I think I might be the one person who writes questions poorer than the BSAS.....

True active return = manager's total return - manager's normal portfolio return
Misfit active return = manager's normal portfolio return - investor's benchmark

I wanted to know what the "active return" was.... aka manager's total return - investor's benchmark

Iginla2011

Soccertom9 Wrote:
-------------------------------------------------------
> Return of portfolio = 10%
> Broad market Benchmark = 12%
> Manager's Normal Portfolio return = 9%
>
>
> Sorry thats just the way I remember it in my head
> (how I wrote it before)

True Active +1
Active -2
Misfit -3

Analti_Calte

pimpineasy Wrote:
-------------------------------------------------------
> Para dont understand what u mean exactly?

I was talking about Soccer. I would have put your answer from his first post. His part where it said same style through me off.

bboo

Para dont understand what u mean exactly?



Edited 1 time(s). Last edit at Tuesday, May 31, 2011 at 08:43PM by pimpineasy.