Chapter 7 CAIA

Question 1

Benchmarking

Answer 1

Benchmarking, often referred to as performance benchmarking, is the process of selecting an investment index, an investment portfolio, or any other source of return as a standard (or benchmark) for comparison during performance analysis. Benchmarking is typically performed by investors and analysts external to an investment pool for the purpose of monitoring performance.

Chambers, Donald R.; Anson, Mark J. P.; Black, Keith H.; Kazemi, Hossein. Alternative Investments: CAIA Level I (Wiley Finance) (p. 159). Wiley. Edición de Kindle.

Question 2

Peer benchmarks

Answer 2

Peer benchmarks are based on the returns of a comparison or peer group. The peer group is typically a group of funds with similar objectives, strategies, or portfolio holdings.

Chambers, Donald R.; Anson, Mark J. P.; Black, Keith H.; Kazemi, Hossein. Alternative Investments: CAIA Level I (Wiley Finance) (p. 160). Wiley. Edición de Kindle.