Definition of benchmark

1. a standard, norm, or yardstick to judge one's performance as an individual or company.
2. a standard measurement or metric used to evaluate the performance of a portfolio. For example, an appropriate stock or bond index can be used to gauge the performance of an investment such as a mutual fund. An example is the Europe, Australia, and Far East (EAFE) index, a value-weighted index of the equity performance of major foreign markets, which is often used to evaluate the performance of international mutual funds.

1. a study to compare actual performance to a standard of typical competence.
2. standard unit for the basis of comparison; universal unit that is identified with sufficient detail so that other similar classifications can be compared as being above, below, or comparable to the benchmark standard. For example, the 3-month federal Treasury Bill rate is a benchmark for all U.S. interest rates.

a computer program used to test the performance of a computer or a piece of software. For example, the speed with which computers do arithmetic is often measured by running a prime-number- finding algorithm called the Sieve of Eratosthenes.

Benchmark results are always somewhat untrustworthy because no single program tests all aspects of a computer's operation.A particular benchmark may exaggerate a difference between two machines that is unimportant in practice, or it may conceal an important difference.

any basis of measurement, such as an interest rate, an index or peer grouping of stock or bond prices or other values, used as a reference point. For example, the standard & poor's 500 composite index is the most commonly used benchmark for comparing the performance of stock portfolio managers. The 10-year Treasury note yield is a benchmark that might be used to adjust a floating rate note. Benchmark indexes are also called referenceindexes.

something that serves as the standard by which all other similar items can be measured or compared. In advertising, this can refer to the creative aspect of a commercial or advertisement, a particular advertising campaign, a type of product presentation, a media plan, or the manner in which a particular agency represents a particular client.

1. a permanently affixed mark that establishes the exact elevation of a place; used by surveyors in measuring site elevations, or as a starting point for surveys.
   Example: The U.S. Coast and Geodetic Survey implants brass markers in the sidewalks of downtown areas to serve as benchmarks. The benchmark indicates the official elevation above sea level for the spot at which the marker is placed.

2. a standard measurement that forms the basis for comparison.
   Example: The Russell-NCREIF Real Estate Performance Report (see NCREIF) is the benchmark for institutional real estate performance.