问题如下：
8 The benchmark for Fund 3 has which of the following characteristics of a valid benchmark?
选项：
A. Investable
B. Measurable
C. Appropriate
解释：
B is correct.
Daily reported performance is available for the benchmark; thus, it is possible to measure the benchmark’s return on a reasonably frequent and timely basis.
A is incorrect because the benchmark is a cap-weighted bond index that is rebalanced frequently, making it difficult to replicate. For a benchmark to be investable, it must be possible to replicate and hold the benchmark to earn its return (at least gross of expenses). The sponsor should have the option of moving assets from active management to a passive benchmark. If the benchmark is not investable, it is not a viable investment alternative. Bond indexes are often not investable and are rebalanced frequently over time.
C is incorrect because the index has a meaningful investment in foreign bonds, whereas Fund 3 invests only in domestic bonds, making the benchmark inappropriate. The benchmark must be consistent with the manager’s investment style or area of expertise.
