Benchmark
Benchmarks generally refer to standards or averages by which similar items can be compared. In the financial world, a company, a group of companies, or a portfolio are used as a standard of performance (i.e. benchmarking). |
Similar financial terms
Sharpe benchmarkA statistically created benchmark that adjusts for a managers' index-like tendencies.
Pre-trade benchmarks
Prices occurring before or at the decision to trade.
Posttrade benchmarks
Prices after the decision to trade.
Benchmark error
Use of an inappropriate proxy for the true market portfolio.
Benchmark interest rate
Also called the base interest rate, it is the minimum interest rate investors will demand for investing in a non-Treasury security. It is also tied to the yield to maturity offered on a comparable-maturity Treasury security that was most recently issued ("on-the-run").
Benchmark issues
Also called on-the-run or current coupon issues or bellwether issues. In the secondary market, it's the most recently auctioned Treasury issues for each maturity.
Customized benchmarks
A benchmark that is designed to meet a client's requirements and long-term objectives.
