Very conceptual question:
The benchmark has the following characteristics:
1. It uses the top 10% of U.S. portfolio managers each year in each asset class a the benchmark for toptech managers;
2. TopTech is very careful to make sure that its managers are familiar with the securities in each benchmark asset class;
3. the identities and weights of various securities in the toptech benchamrk are clearly defined
The toptech benchmark contains all the following properties of a valid benchmark except
A. It is investable
B. it is unambiguous
C. it is reflective of current investment opinion
Should this be A or B? I would think BOTH A and B are violated. It has to be unambiguous to be investable. And if it is investable it must be unambiguous.作者: iteracom 时间: 2013-4-3 20:22
Agree….manager benchmarks cannot be known in advance, are not investable, are ambiguous, etc
Confused about the answer on this one…作者: bdavi77962 时间: 2013-4-3 20:24
A. It is investable
B. it is unambiguous — taken care.
C. it is reflective of current investment opinion —- taken care.
Ans - A:
B. it is unambiguous -satisfies due to : the identities and weights of various securities in the toptech benchamrk are clearly defined. How they have done is irrelevant as the question says they have taken care of this. Hence leave this.
C. it is reflective of current investment opinion -satisfies due to : TopTech is very careful to make sure that its managers are familiar with the securities in each benchmark asset class; How they have done is irrelevant as the question says they have taken care of this. Hence leave this.
