Podcast
Play an AI-generated podcast conversation about this lesson
Questions and Answers
What is the purpose of defining a benchmark for mutual fund schemes?
What is the purpose of defining a benchmark for mutual fund schemes?
- To advertise the scheme to potential investors
- To assess the performance of the scheme against a comparable standard (correct)
- To manipulate the reported performance of the scheme
- To create confusion about the scheme's performance
Who typically constructs most benchmarks for mutual fund schemes?
Who typically constructs most benchmarks for mutual fund schemes?
- Government regulatory bodies
- Independent auditing firms
- Stock exchanges, credit rating agencies, securities research houses, or financial publications (correct)
- Mutual fund managers
What are the requirements for a credible benchmark for mutual fund schemes?
What are the requirements for a credible benchmark for mutual fund schemes?
- It should be in line with the investment objective and strategy of the scheme (correct)
- It should be calculated by the scheme manager
- It should be determined by the scheme's competitors
- It should be vague and undefined
Why is the choice of benchmark simplest for an index fund?
Why is the choice of benchmark simplest for an index fund?
Signup and view all the answers
Who benefits from an appropriate performance benchmark for mutual fund schemes?
Who benefits from an appropriate performance benchmark for mutual fund schemes?
Signup and view all the answers
