Benchmark risk
A) is inevitable and is never a significant issue in practice.
B) is inevitable and is always a significant issue in practice.
C) cannot be constrained to keep a Treynor-Black portfolio within reasonable weights.
D) can be constrained to keep a Treynor-Black portfolio within reasonable weights.

Question

Quizplus · Accepted Answer

Benchmark risk can be managed or constrained through various strategies, including the use of a Treynor-Black model, which allows for the optimization of a portfolio by balancing active and passive investments to maintain reasonable weights and manage benchmark risk effectively.

Benchmark Risk