Question

If an agent recommends that a client invest a portion of his portfolio in an international stock fund and is asked whether she should compare the performance of the fund against the S&P 500 Index, how should the agent respond?

Answer 1

Answer:

A) No, it is preferable to compare the fund against the Morgan Stanley Capital International Europe, Australasia, Far East (EAFE) Index because it covers international securities.

Explanation:

As It is important that a specific mutual fund should be compared against the benchmark i.e. considered appropriate. The performance of the international fund should also be compared against the foreign stock index like EAFE index  

So in this way the agent should be responded to the current situation

Therefore the option a is correct