Answer-first summary for fast verification
Answer: For a relative return objective, the selected benchmark must be investable.
**Explanation:** - **Option A** is incorrect because a return objective can indeed be specified as a required rate of return, such as the amount needed to achieve a specific financial goal (e.g., retirement income). - **Option B** is incorrect because return objectives must align with the client's risk tolerance. Higher expected returns typically involve higher levels of risk. - **Option C** is correct because when setting a relative return objective, the benchmark used should be investable, meaning it can be replicated or tracked in practice. This ensures the objective is realistic and achievable.
Author: LeetQuiz Editorial Team
Ultimate access to all questions.
No comments yet.
With regard to an investment policy statement, which of the following statements about return objectives is most accurate?
A
A return objective cannot be defined as a required rate of return.
B
Return objectives should be established without consideration of risk objectives.
C
For a relative return objective, the selected benchmark must be investable.