What does it mean for a benchmark to be "measurable"?

A benchmark being "measurable" means that it can be quantified for performance evaluation. This is a crucial characteristic of a benchmark as it allows for the assessment of investment performance against a specific standard. A measurable benchmark provides a clear and objective reference point for comparing the performance of a portfolio or investment strategy.

By quantifying returns and other relevant metrics, investors and analysts can effectively gauge how well their investments are performing in relation to the benchmark. This quantification facilitates the identification of trends, risks, and areas of improvement or underperformance.

In the context of evaluating the performance of a portfolio, a benchmark must present clear, numerical criteria that can be tracked over time, thus enhancing transparency and accountability in investment management practices. This helps investors make informed decisions based on concrete data rather than subjective interpretations.