BENCHMARK

A benchmark pertains to a standard that works as a mean or a point of reference. In the context of the financial industry, benchmark pertains to a measurement standard to gauge the performance of a particular investment portfolio.

Indexes are seen as the most common form of indexes. Such are financial tools that are used to represent a group of individual market prices or a collection of data points. Asset classes have their corresponding benchmarks. One of the most popular benckmarks is the S&P 500 index which sees the consideration of the market capitalization of 500 large American companies. In turn, these are elected by a dedicated committee which follows a weighting methodology.

Within the field of Computer Science, a benchmark is determined through the running of a number of computer operations and software so as to measure the performance of a specific product or service.