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Options
- A
The risk profile of peer group funds is likely to be higher than the compared fund and this makes it better for comparison
- B
Peer group funds are managed by the same fund managers which makes it easy for comparison
- C
Market index takes similar risk so its ideal for comparison
-
A market index is a passive portfolio but peer group funds may have similar strategies
Correct answer
Why this is the answer
Peer group comparisons are more meaningful because they involve actively managed funds with similar strategies, whereas market indices are passive benchmarks.
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