Which One of the Following Measures Time-Weighted Returns and Allows

question 88

Multiple Choice

Which one of the following measures time-weighted returns and allows for compounding?

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

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Definitions:

External Benefits

Benefits of a good or service that are not captured by the market price and are received by third parties.

Competitive Market

A market structure characterized by many buyers and sellers, free entry and exit, and products that are similar but differentiated.

Maximize Profit

The goal of adjusting production or service levels to achieve the highest possible returns.

Equilibrium Quantity

The quantity of goods or services supplied that is equal to the quantity demanded at the market equilibrium price.