Which of the following statements about portfolio return calculation is most accurate? Time-weighted returns are best for measuring the returns of a:
A) fund manager, whereas money-weighted returns are best for a portfolio owner.
B) portfolio owner, whereas money-weighted returns are best for a fund manager.
C) fund manager, whereas money-weighted returns are no longer used in practice.
D) portfolio owner, whereas money-weighted returns are generally used in practice.

Question

Quizplus · Accepted Answer

Time-weighted returns are used to evaluate a fund manager's performance as they are not affected by cash flows, while money-weighted returns consider cash flows and are more relevant for a portfolio owner.

Which of the Following Statements About Portfolio Return Calculation Is