A portfolio manager uses two different proxies for the market portfolio, the S&P 500 index and theMSCI World index. Differences in the manager's portfolio performance resulting from the differentmarket portfolios is referred to as
A)The size effect
B)The market effect
C)Measurement error
D)Benchmark error
E)Manager's performance error

Question

Quizplus · Accepted Answer

Differences in performance resulting from using different market proxies are referred to as benchmark errors.

A Portfolio Manager Uses Two Different Proxies for the Market