If You Want to Measure the Performance of Your Investment

question 8

Multiple Choice

If you want to measure the performance of your investment in a fund, including the timing of your purchases and redemptions, you should calculate the ________.

• A) geometric average return
• B) arithmetic average return
• C) dollar-weighted return
• D) index return

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Definitions:

Taxes

Obligatory fiscal dues or alternative forms of impositions placed on taxpayers by a governmental body to support government expenditures and multiple public costs.

Fiscal Policy

Government policies related to taxation and spending that are used to influence economic conditions.

Aggregate Demand

The all-encompassing desire for goods and services within an economic framework, set against a particular uniform price level over a given interval.

Government Purchases

Expenditures by the government sector for goods and services that it intends to consume or invest in as part of its economic activities.