14. Explain how it can be possible for a portfolio manager to outperform a benchmark over a given period of time, but still fail to meet the investment objective of a client. a. An index or benchmark may produce low or even negative returns over part of the measurement period. Thus, even if a manager outperforms the benchmark overall, the objectives of a particular fund (such as meeting required liabilities) may not be met b. A portfolio manager may outperform the benchmark in performance terms, but at the same time may mismatch cash flows between assets and liabilities, thus not meeting certain clients' needs (such as pension funds or life insurance companies). c. The portfolio may outperform in terms of performance, but the manager may utilize high-yield bonds or other instruments which fall outside the investment objectives, thus acting against a clients' wishes. d. Any of the above may be true