Loading...
CFA Level 1
Portfolio Management

Benchmark Selection for Equity Portfolio

Very Hard Performance Evaluation Benchmarking

John is evaluating the performance of his investment portfolio, which predominantly consists of large-cap U.S. stocks. To facilitate an objective assessment, he seeks to select an appropriate benchmark that closely aligns with the risk and return profile of his portfolio. He considers three options:

  • A comprehensive large-cap U.S. stock index.
  • A broad global equity index that includes small and mid-cap stocks.
  • A fixed-income index that reflects the performance of U.S. government bonds.

Which of these benchmarks would be the most suitable for comparing the performance of John's large-cap U.S. equity portfolio?

Hint

Submitted12.8K
Correct10.1K
% Correct78%