The Purpose of Performance 'Benchmarks' Is To

question 56

Multiple Choice

The purpose of performance 'benchmarks' is to:

• A) provide a yardstick against which the performance of funds can be measured.
• B) reduce the risk of a passive fund.
• C) promote 'short- termism'.
• D) demonstrate that fees paid are declining.

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Definitions:

Operating Income

The income earned from a company's day-to-day operations, calculated before taking into account interest and taxes.

Margin Of Safety

The difference between actual sales and break-even sales, providing a cushion against which sales can fall before a business incurs a loss.

Break-Even Point

The level of sales or production at which total revenues equal total expenses, resulting in no profit or loss for the business.

Sales

The total amount of goods or services sold by a company within a specific period, generating revenue.