1. A portfolio manager is considering two options for a benchmark index. The first is an absolute return based on a minimum return target of 9.5% and the second is the median of the universe of US large-cap core equity managers. Which of the following properties of a return point Valid reference do these two options have?

Specified in advance

invertible

Measurable

unambiguous

2. You're trying to understand why your portfolio of top large-cap stocks underperformed its benchmark and perform a sector attribution analysis based on the past year:

Sector	Sectoral Returns	Portfolio weights	Reference weights
Information technology	10,75%	18,71%	19,06%
Consumer staples	12,31%	16,52%	16,10%
Energy	8,63%	9,38%	9,53%
Utilities	-3,92%	15,65%	14,87%

From this analysis, which sector is the main contributor to the underperformance of the core portfolio relative to its benchmark?

Energy

Utilities

Information technology

Consumer staples

Answer rating: 100% (QA)

The detailed answer for the above question is provided below Properties of a Valid Reference for Ret... View the full answer