CFA Practice Question

There are 294 practice questions for this study session.

CFA Practice Question

Which measure is the best to use to evaluate and compare the investment skill of asset managers?

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).
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