What Is the Major Drawback of the Total Return Measure

question 14

Essay

What is the major drawback of the total return measure? Why is it the most common return calculation used by investors?

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Definitions:

Loaned Out

Refers to funds or assets that have been borrowed by one party from another under agreed conditions, often involving interest.

Interest

The charge for borrowing money, usually expressed as a percentage of the amount borrowed.

Forbidden

Something that is not allowed or is prohibited.

Present Value

The assessed current worth of a future money amount or cash flow series, using an established rate of return.