The money management industry uses dollar-weighted returns __________ for performance evaluation.

Question

Quizplus · Accepted Answer

Dollar-weighted returns are used less frequently than time-weighted returns because they are influenced by the timing and amount of cash flows, which can distort performance evaluation. Time-weighted returns are preferred as they provide a more accurate measure of a portfolio manager's performance by eliminating the impact of cash flows.

The Money Management Industry Uses Dollar-Weighted Returns __________ for Performance