If an investor earns a return that exceeds the return on the S&P 500 stock index,that investor outperformed the market on a risk-adjusted basis.

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Quizplus · Accepted Answer

This statement is true. The S&P 500 is a benchmark index commonly used to represent the overall performance of the stock market. If an investor earns a higher return than the S&P 500, they have outperformed the market. However, it's important to consider the level of risk taken on to achieve that return, as a higher return may come with higher risk. Therefore, outperforming on a risk-adjusted basis means achieving higher returns while taking on an appropriate level of risk.

If an Investor Earns a Return That Exceeds the Return