tycoon

Which of the following statements is most correct?

A) If an investor achieves relative performance objectives, they will also be assured of meeting absolute performance objectives.

B) If an investor achieves absolute performance objectives, they will also be assured of meeting relative performance objectives.

C) An investor can achieve relative performance objectives, and still fail to achieve absolute performance objectives.

D) Most lifestyle objectives are best framed in terms of relative performance objectives.

---

Answer and Explanation

An investor can achieve relative performance objectives, and still fail to achieve absolute performance objectives. For example, a benchmark may have a negative return during a given period. Exceeding the benchmark is no assurance that absolute performance objectives will be realized. Conversely, failing to match a relative objective does not insure that an absolute objective will not be met.