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:

Paid-In Capital

Section of stockholders’ equity representing what stockholders have invested into the corporation.

Retained Earnings

Retained earnings represent the cumulative amount of net income retained in the company rather than distributed to shareholders as dividends.

Dividends Payable

A financial accounting term referring to the declared dividends to be paid to a corporation's shareholders out of current or retained earnings.