Question: What explains the financial performance of brokerage houses? Table shows the 1-year performance of asset-allocation blends of selected brokerage houses, together with the percentages recommended in stocks and bonds at the end of the period.
a. What proportion of the variation in performance is explained by the recommended percentages in stocks and bonds?
b. Do the recommended percentages explain a significant amount of the variation in performance?
c. Does the recommended percentage for stocks have a significant impact on performance, adjusted for the recommended percentage for bonds?
d. Does the recommended percentage for bonds have a significant impact on performance, adjusted for the recommended percentage for stocks?
e. Which appears to have a greater impact on performance: stocks or bonds?
