Which of the following captures cash flows during the evaluation period?

Question

Quizplus · Accepted Answer

Dollar-weighted returns capture the actual cash flows during the evaluation period by taking into account the timing and amount of cash inflows and outflows. Time-weighted returns only capture the performance of the investment without considering the impact of cash flows. Actual diminishing returns are a phenomenon where the incremental return decreases as more capital is invested. Opportunity cost returns focus on the opportunity cost of choosing one investment over another.

Which of the Following Captures Cash Flows During the Evaluation