Investor Breadth

When using the ‘Fundamental Law of Active Management’, can anyone explain the ‘investor breadth’? In one Schweser exam they used the figure for an S&P 500 index fund as 500, though I would have thought, if it’s defined as ‘the number of independent decisions’, it is not as simple as just the total number of stocks. Isn’t an investment in the S&P 500 just one independent decision?

It’s the number of independent decisions or the number in the stock research universe. Ignore my previous post.

Thanks, I think is was used incorrectly in that particular Schweser question…