Misfit active return

CFA Level III
#1

Is below statement correct?

Misfit active return refers to performance of the manager relative to the imperfect benchmark (i.e. a benchmark that is not suitable for the manager’s style). It basically represents returns earned due to stock selection skill of manager.

#2

That statement is incorrect.

Misfit active return is the Managers True benchmark vs whatever the investor/clients benchmark is.

#3

Thanks…it’s from Finquiz note…I feel weird as well.

#4

From the perspective of the manager, the benchmark is not perfect, he wants to make perfect; hence generating active misfit return.

" I used to be arrogant, now am perfect "