Dean has been asked to propose a benchmark against which his firm's Global Equities Fund may be measured. As part of his proposal, he has been asked to suggest what characteristics are most desirable. Which of the following characteristics are considered important? • a. An index that is reconstituted every day O b. An index that has a large number of small capitalisation stocks that are not readily traded • c. An index that monitors the performance of corporate debt • d. An investable index that has an observable and transparent approach to construction Oe. An index that is subject to high levels of turnover

The correct answer is:

• d. An investable index that has an observable and transparent approach to construction

Here's why:

• a. An index that is reconstituted every day may not be desirable as it could lead to high transaction costs and may not accurately reflect long-term performance.

• b. An index that has a large number of small capitalisation stocks that are not readily traded may not be desirable as it could lead to liquidity issues and may not accurately reflect the market.

• c. An index that monitors the performance of corporate debt would not be a suitable benchmark for a Global Equities Fund as it does not reflect the performance of equities.

• e. An index that is subject to high levels of turnover may not be desirable as it could lead to high transaction costs and may not accurately reflect long-term performance.

Therefore, the most desirable characteristic for a benchmark for Dean's Global Equities Fund would be an investable index that has an observable and transparent approach to construction. This ensures that the index accurately reflects the market and is easy to understand and replicate.