Q4. An analyst managed a portfolio for many years and then liquidated it. Computing the internal rate of return of the inflows and outflows of a portfolio would give the: A) money-weighted return. B) time-weighted return. C) net present value.
Q5. Time-weighted returns are used by the investment management industry because they:
A) are not affected by the timing of cash flows. B) result in higher returns versus the money-weighted return calculation. C) take all cash inflows and outflows into account using the internal rate of return.
Q6. Why is the time-weighted rate of return the preferred method of performance measurement?
A) Time-weighted returns are not influenced by the timing of cash flows. B) Time weighted allows for inter-period measurement and therefore is more flexible in determining exactly how a portfolio performed during a specific interval of time.
C) There is no preference for time-weighted versus money-weighted.
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发表于 2008-12-30 16:57
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