Explain the Concept of a Benchmark and Why Benchmarks Provide

question 27

Essay

Explain the concept of a benchmark and why benchmarks provide value when evaluating the performance of a security or portfolio.

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Definitions:

Minimum of Effort

A principle suggesting that individuals, systems, or organizations naturally tend to select the path or decision that requires the least amount of work or effort.

Specific Effort

Specific effort refers to the targeted exertion or dedicated work directed towards accomplishing a particular task or achieving a specific goal.

Shopping Effort

The amount of time and energy consumers are willing to spend in the process of searching for, selecting, and purchasing products or services.

Nondurable Good

A good that is consumed or has a lifespan of less than three years, such as food or stationery.