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25 October, 22:06

Your timing was good last year. You invested more in your portfolio right before prices went up, and you sold right before prices went down. In calculating historical performance measures, which one of the following will be the largest? a. arithmetic average return b. geometric average return c. dollar-weighted return d. mean holding period return

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  1. 25 October, 22:28
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    Answer: C. Dollar weighted return

    Explanation: Analyzing an investment based on cost or investment amount and the yield or return on the investment. It calculates the return or profit made on an entire investment by simply balancing the outflow (money spent on investment) and the inflow (income generated from the investment). Dollar weighted return will be largest in calculating historical performance of stock invested when prices were low and sold before fall in the price as the internal rate of return will provide the largest measure in this scenario.
  2. 25 October, 22:34
    0
    Answer: C. dollar-weighted return

    Explanation: The money-weighted rate of return is a measure of the performance of an investment. The money-weighted rate of return is calculated by finding the rate of return that will set the present values of all cash flows equal to the value of the initial investment.

    The money-weighted rate of return (MWR) is equivalent to the internal rate of return (IRR).

    The money-weighted return sets the initial value of an investment to equal the future cash flows such as dividends added, withdrawals, deposits, and the sale proceeds.
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Home » Business » Your timing was good last year. You invested more in your portfolio right before prices went up, and you sold right before prices went down. In calculating historical performance measures, which one of the following will be the largest? a.
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