Continue with the previous question. Consider the following benchmark and managed portfolio.

What is the value added from the security selection?

A. 0.45
B. 0.315
C. 0

Correct Answer: C

The value added from the security selection = w_{P, stocks}R_{A, stocks} + w_{P, bonds} R_{A, bonds}

Since both R_{A, stocks} and R_{A, bonds} are zero, the value added from the security selection is zero.