Your investment policy portfolio specifies that you invest 60% in equities and 40% in bonds. Based on this, you invested 60% of your net worth in Vanguard Equity Funds, which had a benchmark return of 7.8% and an actual return of 9.2% at year end. You invested 40% in Domestic Bond Funds, which had a benchmark return of 3.5% and an actual return of 2.8% at year end. What can be said about the value added from your asset allocation decision? It is ______.

A. positive
B. zero
C. negative

Correct Answer: B

Since you followed your strategic asset allocation policy, there is no value added from your asset allocation decision.