MANAGEMENT

Detailed explanation-1: -A benchmark is a standard or measure that can be used to analyze the allocation, risk, and return of a given portfolio. Individual funds and investment portfolios will generally have established benchmarks for standard analysis.

Detailed explanation-2: -The five measures include the alpha, beta, R-squared, standard deviation, and Sharpe ratio. Risk measures can be used individually or together to perform a risk assessment. When comparing two potential investments, it is wise to compare like for like to determine which investment holds the most risk.

Detailed explanation-3: -The most popular benchmarks for measuring the risk and return of a portfolio are market indexes such as the Russell 1000, Russell 2000, the Dow Jones Industrial Average, and the S&P 500.

Detailed explanation-4: -Often a market index, a benchmark typically provides a starting point for a portfolio manager to construct a portfolio and directs how that portfolio should be managed on an ongoing basis from the perspectives of both risk and return. It also allows investors to gauge the relative performance of their portfolios.