- CFA Exams
- CFA Level I Exam
- Topic 1. Quantitative Methods
- Learning Module 1. Rates and Returns
- Subject 5. Other Major Return Measures
CFA Practice Question
Which measure is the best to use to evaluate and compare the investment skill of asset managers?
B. Net return
C. After-tax return
A. Gross return
B. Net return
C. After-tax return
Correct Answer: A
This is because it does not include any fees related to the management and administration of an investment.
User Contributed Comments 4
| User | Comment |
|---|---|
| michlam14 | to clarify, when referring to Gross return for fund manager: how do we account for the commission in the trading of instruments in the portfolio incurred by the fund manager when they are trading on the investor's behalf? I am assuming as an investor, the gross return would have already accounted for the comission paid to brokers for the execution of trades by the fund manager? |
| johntan1979 | No, gross is before any deduction, including fees, expenses and taxes. |
| khalifa92 | Return - Trading fees Gross Return - non-trading fees Net return |
| khalifa92 | its a portfolio manager to control trading fee's (costs). |