In Selecting Benchmark Portfolios for Comparison, the Client Should Be

question 3

Multiple Choice

In selecting benchmark portfolios for comparison, the client should be certain that they represent

• A) the best possible portfolio construction available
• B) the best but not necessarily feasible portfolio
• C) alternative portfolios that could have been chosen instead of the one chosen
• D) portfolios of varying degrees of risk

---

Definitions:

Outstanding Stock

The total shares of a corporation that are currently owned by all its shareholders, including shares held by institutional investors and restricted blocks held by insiders and company officers.

Vertical Acquisition

The purchase of a company that operates within the same industry but at a different level of the supply chain.

Horizontal Acquisition

The process of a company acquiring another company in the same industry to increase its market share.