- CFA Exams
- CFA Level I Exam
- Topic 9. Portfolio Management
- Learning Module 62. Portfolio Risk and Return: Part I
- Subject 1. 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). |