A good benchmark should have

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Reference no: EM131898668

1. A good benchmark should have:

a) High tracking error to your portfolio

b) A lot of turnover (changes) each year

c) Most of the positions in your portfolio should compare positively to the weights in the portfolio (i.e., the portfolio weight is greater than the benchmark weight)

d) A much different P/E than the portfolio

2. Which of the following is TRUE?

a) Countries have about the same weightings to sectors

b) S&P 500 constituents do not change from year to year

c) Portfolio alpha is positive if the benchmark return is less than the portfolio return

d) If a portfolio has a beta of > 1 to the factor oil and oil prices rise then this would hurt absolute portfolio returns.

Reference no: EM131898668

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