Your firm is managing 4 investment products with the following characteristics: Equity Standard 200 stocks P/E= 1.05x that of the broad market D/E= 0.95x that of the broad market All Economic Sectors Total assets under management= $ 2.5 billion Value Dynamics 110 stocks P/E= 2.0x that of the broad market D/E= 85 percentile of the broad market Overweight in technology, health care and housing sector Total assets under management = $ 1.5 billion Blue Growth 125 stocks P/E= 0.75x that of the broad market D/E= 35 percentile of the broad market Overweight in consumer staples, utilities, and closed end funds Total assets under management = $ 4.5 billion Fixed Income Plus 250 bonds 50% invested in government bonds, half in maturities below 10 years and the rest with maturities above 10 year 25% invested in US Corporate Bonds. 75% of the US Corporates invested in Investment grade bonds and the rest in high yield bonds. 25% in international bonds, half of it in developed markets and the other half in emerging markets Total assets under management = $ 5.0 billion Global Growth This product is a combination of the above four products. Total assets under management = $ 7.5 billion

a. Design a benchmark to measure the performance of each of the products above.

b. Define and justify each component of the benchmarks.