Evaluating Portfolio Performance in Appraisal

Very Easy Performance Evaluation Performance Appraisal

During a recent performance appraisal meeting, an investment manager presented the quarterly performance results of a diversified equity portfolio. The portfolio achieved a 5% return over the quarter, whereas the benchmark index return was 3%. Which of the following statements accurately evaluates the performance of the portfolio?

The portfolio outperformed the benchmark, indicating superior management.

The portfolio underperformed the benchmark, suggesting the manager's investment strategy needs revision.

The performance is equal to the benchmark, demonstrating effective strategy implementation.

Hint

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% Correct96%