The Dollar-Weighted Return on a Portfolio Is Equivalent to

question 58

Multiple Choice

The dollar-weighted return on a portfolio is equivalent to

• A)the time-weighted return.
• B)the geometric average return.
• C)the arithmetic average return.
• D)the portfolio's internal rate of return.

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Definitions:

Economic Profit

The variance between gross receipts and all outlays, including both tangible and intangible costs.

Accounting Profit

The total revenue of a business minus the explicit costs of operating, not including opportunity costs.

Implicit Costs

The opportunity costs that are not directly paid out but represent the loss of potential income from using resources in a certain way.

Opportunity Costs

Missing out on possible advantages from other choices by opting for a particular alternative.