) BASED ON EXHIBIT 1, WHICH OF THE FOLLOWING SUB-STYLES IS MOST CONS...

6.) Based on Exhibit 1, which of the following sub-styles is most consistent with Manager C’s investment style? A. Low P/E B. High yield C. Earnings momentum Spong Jennifer Simko’s fixed-income portfolio has underperformed its benchmark, the Barclays Capital Aggregate Bond Index. Simko asks her investment adviser, Mike Spong, to recommend a new fixed-income manager. Spong selects three fixed-income portfolio managers for Simko to consider: - Mondavi Investment Partners - Smithers Associates - Vertex Group Selected characteristics for each manager’s portfolio are provided in Exhibit 1. Exhibit 1 Selected Portfolio Characteristics for the Benchmark Portfolio and Three Potential Fixed-Income Managers, December 2013 Percent of Market Contribution to Spread Duration Value Sector Benchmark Mondavi Smithers Vertex Benchmark Mondavi Smithers Vertex Treasury 25 25 20 15 0.0 0.0 0.0 0.0 Agency 11 11 11 0 0.4 0.4 0.4 0.0 Credit 25 25 30 24 1.4 1.4 1.6 1.1 Mortgage 34 34 35 43 1.5 1.5 1.6 1.7 Asset-2 2 0 2 0.0 0.0 0.0 0.2 backed CMBS 3 3 4 8 0.1 0.1 0.1 0.5 Cash 0 0 0 8 0.0 0.0 0.0 0.0 Total 100 100 100 100 3.4 3.4 3.7 3.5 Note that in Exhibit 1, the portfolio duration for the benchmark, Mondavi Investment Partners, and Smithers Associates portfolios is 4.7. Portfolio duration for Vertex Group is 4.3. Spong makes the following statements to Simko regarding Exhibit 1: