Chartered Investment Manager (CIM) Practice Exam · Question
When constructing a global equity portfolio for a Canadian pension fund, which of the following is the most appropriate benchmark for performance evaluation?
For a Canadian pension fund investing globally, hedging currency exposure is often a primary concern to mitigate foreign exchange risk. Therefore, the MSCI Worl
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Question: When constructing a global equity portfolio for a Canadian pension fund, which of the following is the most appropriate benchmark for performance evaluation?
Answer options:
- S&P/TSX Composite Index ✅ MSCI World Index (CAD Hedged)
- FTSE Global All Cap Index
- Dow Jones Industrial Average
Correct answer: MSCI World Index (CAD Hedged)
Explanation: For a Canadian pension fund investing globally, hedging currency exposure is often a primary concern to mitigate foreign exchange risk. Therefore, the MSCI World Index (CAD Hedged) is the most appropriate benchmark as it reflects global equity performance adjusted for Canadian dollar investors.
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