What measure for investment returns computes the return for each period and takes the average of the results?

Question

Quizplus · Accepted Answer

Time-weighted return measures for investment returns by computing the return for each period and takes the average of the results. It finds the holding period for each period and averages them. If the investment is for more than one year, take the geometric mean of the annual returns to find the time weighted rate of return for the measurement period. The time-weighted return is the preferred method of performance measurement because it is not affected by the timing of cash flows.

What Measure for Investment Returns Computes the Return for Each