The Primary Reason to Use a Dual Rate Allocation System

question 93

True/False

The primary reason to use a dual rate allocation system is to focus a manager's performance evaluation on factors under the manager's direct control.

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Definitions:

Government Bond Rate

The interest rate offered by government securities, which is often seen as a risk-free benchmark against which other investment yields are measured.

Rate Of Inflation

The magnitude of acceleration in average prices for goods and services, which causes a downfall in the ability to procure.

Treasury Bills

Short-term government securities with maturity periods of one year or less, sold to finance the national debt.

Capital Gains

The profit earned from selling an asset for more than its original purchase price.