The BEST definition of a benchmark portfolio is:

By Investopedia AAA
A:

The BEST definition of a benchmark portfolio is:
a) A preset list of securities to be used to compare the performance of an actual portfolio

b) A model portfolio with the same asset allocation percentages of the actual portfolio

c) The portfolio that the IA must attempt to outperform with an actual portfolio

d) An index such as the Standard & Poor's 500





The correct answer is "a." While all of the choices could be considered definitions of a benchmark portfolio, the best definition is the specific list of securities that will be compared with the performance of the actual portfolio.



RELATED FAQS

  1. How much of a diversified portfolio should be invested in the electronics sector?

    Learn how investing style determines how much of a diversified portfolio an investor chooses to allocate to the electronics ...
  2. What are some common questions an interviewer may ask during an interview for a position ...

    Discover the world of investment banking and learn what questions are likely during an interview for a position with an investment ...
  3. What is the average annual return for the S&P 500?

    See the historical performance of the S&P 500 Index, and examine a number of factors that affect an investor's actual return ...
  4. What licenses and certifications do you need for a career in portfolio management?

    See what it normally takes to begin a career in investment portfolio management, including education, experience, licenses ...
RELATED TERMS
  1. Sharpe Ratio

    A ratio developed by Nobel laureate William F. Sharpe to measure ...
  2. Exchange-Traded Fund (ETF)

    A security that tracks an index, a commodity or a basket of assets ...
  3. Smart Beta

    Investment strategies that emphasize the use of alternative weighting ...
  4. Discretionary Investment Management

    A form of investment management in which buy and sell decisions ...
  5. Account Minimum

    The minimum balance required to be maintained in an investment ...
  6. Capital Growth

    The increase in value of an asset or investment over time. It ...

You May Also Like

Related Articles
  1. Mutual Funds & ETFs

    Is Amazon a Prime Pick for Your Portfolio?

  2. Mutual Funds & ETFs

    Should You 'Like' Facebook in Your Portfolio?

  3. Mutual Funds & ETFs

    Google: Should It Be Part of Your Portfolio?

  4. Mutual Funds & ETFs

    Invesco PowerShares: Joining Indexing, ...

  5. Bonds & Fixed Income

    A Look at the Pros and Cons of Muni ...

Trading Center