Answer: the ability of a stock screening criterion to generate excess returns.

## Explanation Fundamental managers most likely use backtesting to assess **the ability of a stock screening criterion to generate excess returns**. - **Option C** is correct because fundamental managers typically develop investment strategies based on fundamental factors (such as P/E ratios, earnings growth, book value, etc.) and use backtesting to evaluate whether these screening criteria would have generated alpha (excess returns) in the past. - **Option A** (how changing key assumptions impact strategies) is more related to sensitivity analysis or scenario testing. - **Option B** (how strategies would perform in a hypothetical environment) describes forward-looking simulations rather than backtesting historical data. Backtesting allows fundamental managers to validate their investment hypotheses by testing how their screening criteria would have performed historically before implementing them in live portfolios.

Author: LeetQuiz Editorial Team