Answer: A benchmark should be equally applied to all risky assets irrespective of their risk exposure.

## Explanation Let's analyze each statement: **A. A benchmark should be well-defined.** - **TRUE** A benchmark must be clearly specified and unambiguous so that performance can be accurately measured against it. **B. A benchmark should be replicable.** - **TRUE** A benchmark should be replicable so that investors can create a passive portfolio that tracks it. **C. A benchmark should be equally applied to all risky assets irrespective of their risk exposure.** - **FALSE** This statement is NOT true. Benchmarks should be appropriate for the specific investment strategy and risk profile. Different assets with different risk exposures should have different benchmarks that reflect their specific risk characteristics. For example, a high-yield bond portfolio should not use the same benchmark as a government bond portfolio. **D. A benchmark should be tradeable.** - **TRUE** A benchmark should be tradeable so that investors can actually invest in the securities that make up the benchmark. The incorrect statement is **C** because benchmarks should be tailored to the specific risk characteristics and investment objectives of the portfolio being measured, not applied equally to all assets regardless of their risk exposure.

Author: LeetQuiz .