Multiple Choice (2.s polhts eacn) computing an average return that takes into co

Question

Multiple Choice (2.s polhts eacn) computing an average return that takes into consideration compounding, the most 1. When appropriate measure is the: a. dollar-weighted return. b. geometric average return. c. arithmetic average return. 2. n takes into consideration: Unlike other types of return measures, the dollar-weighted retur a. historical rates of return that have been realized. b. compounding of returns over multiple time periods. c. additional cash flows into and out of the investment. 3. The probability of an economic state being realized will most likely affect the: a. realized return. b. expected rate of return. c. arithmetic average return. If the normal distribution describes the distribution of returns, the percentage of returns that ar within two standard deviations of the average is closets to: 4. a. 6896. b. 9596. ?. 9990. 5. A distribution that is not symmetric is best described has having: a. kurtosis. b. normality. c. skewness. 6. A risk premium is the expected return above the: a. market return. b. realized return. c. risk-free return. 7. Which of the following is a measure of the excess return per unit of total risk? a. Beta b. Sharpe ratio c. Information ratio

Explanation / Answer

“Dollar Weighted Return” takes into account the internal rate of return of the company, it looks into the changes in cash flows (both inflows and outflows of the company), “arithmetic average return” is the mean of returns over a period of time while “geometric average return” is also an average return of investments but this takes into account the compounding methodology. So correct answer is the option (b).

Related Questions

Navigate

• Browse (All)
• Browse M
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.