Peter is a medical student and does not have a background in finance. He reads an article in a financial journal that the Internal Rate of Return (IRR) of a stock portfolio is 3%. What type of challenge does this number present?
A) direction of "good"
B) unit of analysis
C) scale of data
D) type of stock

Question

Quizplus · Accepted Answer

The IRR of 3% presents a challenge in understanding whether this is a good or bad return without additional context, such as the risk of the investment or comparison to a benchmark.

Peter Is a Medical Student and Does Not Have a Background