- CFA Exams
- CFA Level I Exam
- Topic 1. Quantitative Methods
- Learning Module 1. Rates and Returns
- Subject 3. Money-Weighted and Time-Weighted Return
CFA Practice Question
True or False?
II. Tax implications are likely different if the types of returns are different.
I. Two investors in the same mutual fund may have different money-weighted returns.
II. Tax implications are likely different if the types of returns are different.
Correct Answer: Both statements are true.
I. This is because they invested different amounts in different years.
II. Taxes are likely to be different on different types of returns (e.g., capital gains versus interest income).
User Contributed Comments 1
| User | Comment |
|---|---|
| khalifa92 | long term capital gains have favorable tax regulations on short term capital gains |