The cumulative wealth index:
A) is measured by adding up the total returns over the holding period and dividing by the investment.
B) uses index values to have a specified beginning value.
C) is the present value of the future cash flows expected from the investment.
D) uses the arithmetic mean as the rate of growth of one's wealth.

Question

Quizplus · Accepted Answer

The cumulative wealth index uses index values to track the growth of an investment over time, starting from a specified beginning value, typically set at 100 or 1.

The Cumulative Wealth Index