- CFA Exams
- CFA Level I Exam
- Study Session 18. Portfolio Management (1)
- Reading 52. Portfolio Risk and Return: Part I
- Subject 1. Major Return Measures

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**CFA Practice Question**

Which return measure reflects a constant dollar investment at the beginning of each time period?

A. Arithmetic mean

B. Geometric mean

C. Holding period return

**Explanation:**The geometric mean reflects a buy-and-hold strategy.

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**User Contributed Comments**
1

User |
Comment |
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Mikehuynh |
Arithmetic mean: - constant $ investment at the beginning of each time period - no compounding effect - > geometric mean, only equal if the time periods are the same |