In Which of the Following Situations Would It Be Most

question 12

Multiple Choice

In which of the following situations would it be most appropriate to measure an investment manager's performance using the IRR rather than the time-weighted average periodic return?

• A) Client hires manager to place capital as soon as possible.
• B) Client requires a large proportion of its invested capital to be liquid at all times for withdrawal on demand.
• C) Client gives manager a line of capital with discretion over when to acquire and dispose of illiquid assets.
• D) All of the above.

---

Definitions:

Financial Health

A measure of the financial stability and viability of an individual, organization, or entity, assessing aspects like liquidity, debt, and profitability.

Third-Party Checks

Checks that are written to one party but transferred to and cashed or deposited by another party.

Paycheck

A document issued by an employer to an employee to pay for services rendered, usually including deductions and withholdings.

Endorses

Supports or approves of something or someone.