Exhibit 18-8
USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S)

Exhibit 18-8
USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S) $$\begin{array}{c}\text { Weights }\\\begin{array} { c c } \text { Palicy } & \text { Actual } \\\hline 50 \% \text { stacks } & 60 \% \text { stacks } \\50 \% \text { bonds } & 40 \% \text { bonds } \\ \quad \quad \quad \quad\text { Retunns } \\\text { Index } & \text { Actual } \\\hline \text { g\% 5tacks } & 9 \% \text { 5tacks } \\5 \% \text { bonds } & 7 \% \text { bonds }\end{array}\end{array}$$
-Refer to Exhibit 18-8. Which of the following statements is true?

A) Sector/security selection hurt the portfolio performance; returns were 1.4% less than if the manager invested the funds in stocks and bond indexes.
B) Sector/security selection improved the portfolio performance by 1.4%; each sector return was higher than for index value.
C) Sector/security selection hurt the portfolio performance; returns were 6.8% less than if the manager invested the funds in stocks and bond indexes.
D) Sector/security selection improved the portfolio performance by 6.8%; each sector return was higher than for index return.
E) None of the above.